Will the Panama Real Estate Boom Last?



Posted: Monday, May 07, 2007

by
New World Real Estate

Living in Panama City you see some pretty amazing things. Machine gun toting para military police doubling on dirt bikes, Kuna Indians, the second shortest people in the world, selling their wares on the streets and CONSTRUCTION. Panama City is blowing up like Las Vegas in 1987. The number of high rise apartment buildings being constructed right now is less than half the number planned to start in the next two years. With an average ground breaking to move in timetable of 18 months, these buildings are going up and becoming livable almost too quickly – as evidenced by the lack of apartment lights illuminating the skyline. Don't get me wrong, there are people living in these newly constructed apartments, I just have a hard time seeing them being filled to capacity when there are more condos available than American Immigrants who they are targeted at.

Btesh Virzi, a large developer here in Panama is a year into construction of six towers, all with oceanfront views, all right next to each other, and none sold out. They are able to build these towers even quicker by sharing equipment and solving the logistical problems associated with having multiple but non-contiguous sites. All of their brochures and promotional materials are in English; their heaviest advertising is in the English language magazines here in Panama . But they are not alone in building up huge buildings that have the potential to remain empty long after they are completed. And these buildings are right at the start of the Corredor Sur, a new high speed toll road leading from Toculmen Airport to Panama City . Once you get outside the city, things really get interesting.

In a recent meeting with the Vice President of Beno Btesh, another developer who currently has a handful of projects going on in the city, we were shown his 65 hectare ‘vision' on the Pacific Coast. The land has been purchased and drawings were up for a private resort and residences at Punto Chame. A 50 minute drive out of the city and only accessable by boat, Punto Chame has some of the most beautiful white sand beaches this side of the canal. The grand vision reminded me of Panama City , not this one, but Panama City , Florida . The drawings and sketches showed 18 story towers sitting on the beach, with pools set back and houses behind that. Why would someone design a resort in such a way that it took away the very thing that people go to resorts to find, tropical atmosphere and laid back living. I was disappointed and disillusioned with what I saw as an attempt to turn Panama into another cheap strip of sand that does nothing more than line developer's pockets.

Panama is expanding, rapidly. Is it sustainable? I don't know. Housing speculators are hoping it is, for at least as long as it takes for them to flip the houses, apartments and projects they have their money invested in. Pre-construction is booming, the feasibility of it sustaining itself is up in the air. We can only wait and see what happens.

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Andrew Cowan works in Panama with a Panama Real Estate Company as well as a Panama Travel Company.

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