property in panama good bad or ugly
News Posted On: 06 March 2009
Investing in off plan property overseas no longer has the razzmatazz, or attracts the widespread media coverage it did last year, but to disregard it in the present climate is folly, writes Property Abroad emerging markets analyst Julie Liddle...
Off Plan in Panama
This time last year the newspapers were awash with stories about where best to invest in off plan property overseas but now they are mute, does that mean off plan properties overseas can't still be profitable investments?
The answer is no, people simply need to look harder to find the news and positive indicators that tell them what properties and where will bring the best returns. I have chosen Panama to give an example of the returns that still exist in off plan investment property overseas.
A few months ago the news was filled with all the positive indicators that off plan Panama property was going to appreciate rapidly in value: incredible economic growth, a massive boom in the construction sector, huge hotel chains including Hilton and Trump Towers choosing the country to build massive resort hotel complexes, and perhaps most importantly the Panama Canal Expansion, which would sure up the economic growth that went before and accelerate future growth.
The credit crunch didn't kill all those things off, the mainstream media just became unable to make positive forecasts about emerging property markets, for fear that the situation would worsen badly and they would be left with egg on their faces.
Panama's Economy
Panama's services sectors contributes 80% of the country's GDP, a large chunk of this can be attributed to revenues earned by the Panama Canal, including: insurance, container ports, flagship registry and operation of the Colon Free Zone, and the rest to tourism which has grown massive in recent years.
The Panama Canal runs between Central and South America, and is the only waterway linking the Pacific and Atlantic oceans. The expansion due to be completed in 2014, will double the Canal's capacity, and increase revenues earned from its operation by between 100 and 200 percent. This will then massively boost economic growth in Panama.
Economists expect the rapid GDP growth Panama enjoyed between 2004 and 2008 only to slow in 2009, and to pick back up in 2010. The run up to the Canal expansion being completed will make Panama a highly sought after location for commercial investors, and will see rising Foreign Direct Investment contribute to steadily accelerating economic growth until the next boom in 2014.
Make no mistake Panama is set to become one of the largest economies in the world over the next 7-15 years. It is therefore a safe bet that Panama City pads will increase in value during that time, until they are at prices more like comparative London city pads, which equates to massive capital growth.
Properties in virgin coastal and rural regions will also see massive growth as internal wealth grows within the country, and more people buy their own home/move into bigger houses out of the cities.
In the meantime massively rising tourism, from the 21st century boom in medical tourism, and the fact that Panama is to American's what Spain is to Brits, means Panama rental yields will continue to be as impressive as they were reported to be last year: over 7% and up to 15-18% on small city centre apartments.
Property Abroad have dozens of properties for sale in Panama, find out more by visiting the site.
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