for Panamanian Pacific Coastal Properties
The Panama City construction boom is a major factor in creating increased demand for country “second homes”. As the city becomes ever more hectic and successful as a commercial location, the same families buying expensive urban condos will start looking for a quiet country place to unwind and relax on weekends and holidays to regain their sanity. The Pacific coast beaches and mountain highlands are as natural as night follows day.
In addition to this internally generated demand from urban condo sales, there are 100,000,000 million baby boomers, including persons under age 65, only in North America many of whom are looking for an idyllic retirement spot. Pacific coast Panama has the right profile at the right time. Today, Panama is on almost everyone’s radar.
The Government of Panama has very wisely put out the “welcome mat” to attract permanent residents as “pensionados” based on minimal financial requirements of $600 per month pension income.
The surprising fact is that the average “pensionado” in Panama happens to be very well educated and has retirement resources and cash flow much in excess of this minimum number.
Another main source of demand for Pacific coast properties is tourism. Tourism has been increasing by leaps and bounds in Panama with incredible annual percentage increases. Tourism has virtually doubled just in the past 18 months but it is still very low by say Mexican or Costa Rican standards. Hotels room shortages remain a major problem throughout the country and things will only get much worse. Strains are increasingly apparent in the construction area. Labor shortages are starting to develop and waiting 10-12 months for a new house to be built is not unusual adding to a demand for rental properties in the resort areas.
A recent article noted that 50% of people approaching retirement age in the UK have an interest in retiring offshore … albeit not explicitly in Panama. This could be a harbinger of things to come. The American retiree population may not be far behind as home prices rise rapidly in the “sun belt” making this a much less interesting option than even 5 years ago. Even Mexico is being priced out of the market for “modest” housing options.
Canadians are an interesting source of demand and happen to be significantly “over-represented” in the Coronado area because of cold winters and high taxes. On a purely statistical basis based on population one would expect that about 10% of North American expats to Panama would be from Canada. In fact, because of the long historical ties of the USA with Panama, a prudent guess would be that even 95% of all North American expats would be American. The fact, however, is that almost 33% of all North American expats in the Coronado region are from Canada which is a 300% over-representation.
As mentioned earlier, Costa Rica may become a major factor in the demand for Panamanian coastal properties as home prices continue to rise in Costa Rica at levels twice those of Panama. The Costa Rican Government has acted to eliminate “pensionado” privileges without any “grandfathering” provisions. High crime rates continue unchecked in Costa Rica. The Costa Rican Pacific shores attracted many well-to-do Californian surfers, among others, who are slowly realizing that they can catch the same waves at half the price along the Azuero south shores.