Panama Economy Stays Strong - Bucking World Trends

Panama Economy Stays Strong - Bucking World Trends
Date: 2008-09-18 Panama's economy will continue to grow, say analysts, resisting the global downturn led by US economic woes. "The strong economic performance of the last few years continues, despite the deteriorating global environment," said International Monetary Fund (IMF) officials last week in a public statement. "Panama was one of the fastest growing economies in the world in 2007 with real growth rising to 11.2 percent, following an average growth rate of nearly 8 percent in 2004-06 ... Growth in 2008-09 is projected to slow somewhat, to about 8 percent, with the Canal expansion and related investment activities partially offsetting the effects of higher oil prices and the slowdown in the U.S. and the global economy." The IMF has also upped predictions for Panama's economic growth to 8.3 per cent for this year, up from a more modest estimate of 7.7 per cent in April's World Economic Outlook report. "Despite a deteriorating external environment, economic prospects are favorable," concluded IMF board directors, "thanks to the Canal expansion project and associated investment, as well as improvements in competitiveness reflected in expanding export services such as tourism, communications, and transportation." IMF directors commented that Panama's financial sector has not been negatively affected by the global financial turmoil, noting the 'remarkable turnaround' in the non-financial public sector as well; these factors, combined with the strong economic growth, contributed to Panama's improved credit rating from Standard and Poors earlier this year, earning the country a BB+ (stable). Analysts at Deloitte Touche Tohmatsu, a global auditor, also estimate an increase of 8.5 to 9 per cent growth for Panama in 2008, in their Economic Perspectives 2008 report, "marking the sixth consecutive year of strong growth". According to the latest report by Indesa, a Panamanian advisory and financial services firm, the economy is expected to grow 8.4 per cent in 2008 and nearly 10 per cent in 2009, putting Panama at the forefront of economic growth in Latin America , along with Uruguay and Peru, which posted first quarter growth results of 11 and 9.2 per cent respectively. Panama's 2007 gross domestic product (GDP) topped $19.7 billion in 2007, and is projected to surpass $24 billion this year. The driving sectors in Panama are construction, mining, financial services, transport and telecomnunications, and hospitality. Last year, both construction and mining grew by 19.6 per cent apiece according to Indesa, offsetting smaller gains in the manufacturing and agricultural sectors. In fact, it is Panama's service-based economy that has allowed it to weather rising oil prices, as well as its proximity to the US, where economic uncertainty has travelers opting for nearby leisure destinations. Panama is emerging as a significant business and tourism destination in the region for travelers from both North and South America, with the Tocumen airport acting as a regional hub between the continent's major cities. In a report issued by the Panamanian government, authorities estimate the tertiary or service sector accounted for nearly three-quarters of the country's GDP in 2006. "In the past three years (2004, 2005, and 2006), the tertiary sector has developed significantly, with growth rates of 6.8 per cent, 9.4 per cent, and 9.3 per cent," indicated the Panama Trade Policy Review to the World Trade Organization. "Mention should be made of the Colon Free Zone and of the hotel and restaurant subsector, which grew by more than 10 per cent. Other components of the sector also trended upwards significantly, such as financial intermediation, wholesale and retail commerce, and real estate. "The high percentage of GDP that this sector represents and has represented in the past, shows that Panama is a service-oriented economy. In 2006 the sector accounted for 74 per cent of GDP." The external sector has also been a strong economic driver, with the export of goods averaging five per cent annual growth between 1997 and 2006, reaching more than $1 billion USD. By 2006, the net export of goods and services represented one third of Panama GDP. Despite the fact this year's numbers are down from 2007, which saw record growth levels of about 11 per cent, the overall positive trend is in stark contrast to regional predictions. The Economist estimates the mid-term trend for Latin America to average out at 3.9 per cent in 2012, while the IMF predicts a much better performance for Panama. "The medium-term outlook is promising, supported by the canal expansion and other large construction projects," noted the IMF's board of directors last year in a public statement. "For 2007-10, staff projects average annual real GDP growth of about 6.5 per cent, [and] inflation of 2.25 -2.75 per cent." IMF officials commended Panamanian authorities on governmental spending 'restraint' and improved tax collection in reducing public debt and creating a sound basis for economic growth. Declining unemployment, plummeting from 13.6 per cent in 2003 to 7.3 in 2007, was also cited, as was the positive impact of the Panama Canal expansion, expected to be completed in 2013 at a cost of some $5.5 billion. "The project is expected to boost GDP growth and job creation, both directly and by stimulating related industries," noted IMF officials. The Latin Business Chronicle has also placed Panama at the top of its Latin Business Index, thanks to $1.8 billion in direct foreign investment (DFI) in 2007. Panama beat out Chile, which saw more than $14 billion in DFI in 2007, taking the top spot for the higher proportion of investment to its GDP. Inflation, which has typically been very low for Panama thanks to a currency pegged to the US dollar, has risen in step with the recent devaluation of the US dollar. While 2007 saw an increase over the previous year, going from 2.5 per cent to 4.2 cent, Panama's inflation remained well below all other Latin American countries, which averaged 7.75 per cent. However, inflation reached nearly nine per cent in May of 2008, which the IMF largely attributes to rising food and fuel costs

Pamela Oakes from SLAM to speak about “Managing Your Second Home in Panama” at AIREEC

Street Level Asset Management (SLAM) Panama Managing Director, Pamela Oakes, will speak at the American International Real Estate Expo & Conference (AIREEC) - "The Business of Global Second Homes and Resorts" - in Los Angeles

LOS ANGELES--Street Level Asset Management (SLAM) Panama Managing Director, Pamela Oakes, will speak at the American International Real Estate Expo & Conference (AIREEC) on Sunday, Sept. 7, 2008, at 10:30 a.m. PDT. The conference will be held Sept. 5-7, 2008 at the Los Angeles Convention Center in Los Angeles, CA.

Ms Oakes will speak about “Managing Your Second Home in Panama”. She will explain the different options available to investors seeking to purchase and finance a second home in Panama and will provide recommendations for families who will move to Panama part of the year. Slides of the presentation may be downloaded from the company blog propertymanagementinpanama.blogspot.com Additional information on Panama will be available from Sept. 5 for participants at booth E09 of the Central America section of the AIREEC exhibition.

AIREEC http://www.aireec.com/ is a continuation of its ground-breaking maiden event in Manila, Philippines in December 2007. This year's theme is "The Business of Global Second Homes and Resorts" which responds to the tsunami of aging baby boomers entering their retirement years and the emerging "new rich" market from developing countries. Over 60 world renowned speakers, experts and leaders will talk about trends, updates, solutions, choices and options on the emerging "fad" of global 2nd homeownership and 10,000 attendees are expected from over 30 countries around the world.


About Pamela Oakes
Pamela Oakes has more than a decade of property management and relocation experience in Panama. Prior to living in Panama, Pamela lived in the United States, Sweden, Argentina and Chile and has traveled extensively throughout the United States, Latin America and Europe. Pamela has a Bachelor's degree in Political Science and Spanish from Drew University of Madison, New Jersey and studied for a Master's degree in International Politics at American University in Washington, D.C. Pamela has delivered presentations at numerous international conferences on real estate investment, relocation and property management issues in Panama.

Pamela has been an active board member of several non-governmental organizations in Panama including the Friends of the Children's Hospital and the American Society of Panama. In 2005, she received the "Distinguished American Citizen Award" from the United States Ambassador in Panama, the Honorable Linda E. Watt.

About SLAM Panama
Street Level Asset Management (SLAM) Panama http://www.slampanama.com/ is a full-service property management and relocation company based in Panama, dedicated to management of properties for foreigners investing in Panama real estate. SLAM services complement the after-purchase needs of clients by ensuring the preservation of their real estate investments. Additionally, SLAM works along with the law firm of Lombardi Aguilar & Garcia http://www.laglex.com/ to assist in securing relocation and private client services for property owners moving to Panama.

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.If you cannot see the presentation, click the link below to watch "AIREEC Panama":http://web.splashcast.net/full_screen/?channel_code=UQSV8080KC&show_code=KYEI4741MN.

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The Great Panama City Land Rush

Panama City land increases by more than 100%

Now you see it...

Now you don't ... Demolitions continue in the San Francisco neighborhood

during the Panama City real estate boom to give way to new condo buildings

Business weekly Capital Financiero of July 28 quotes the magazine Espacios which says that areas such as Bella Vista, Balboa Avenue, and San Francisco have seen their footage prices increase by more than 100% in only 3 years.
For example, for 2005 the square meter in Balboa Avenue was under $1,000 ($92/sq ft) but sales have been registered now for $5,000 ($464/sq ft).
While in the sector of Bella Vista the cost of square meter varied between $350 and $400, but currently have been sold at almost $1,000.
The magazine states that $300/square meter were paid for San Francisco several years ago but now they reach $700 to $800 ($74/sq ft), with some estimates running into $1000. In suburban Las Cumbres, where 50 years ago land could be bought for $7 / square meter, its price has risen to $40-$50 / square meter.
According to a report by real estate company CBRE, the square meter of condos in Marbella, Bella Vista and San Francisco South) rises to $1,847 ($171.65/sq ft), the oceanfront (Balboa Avenue, Paitilla and Punta Pacifica) is at $2,335 ($217/sq ft) and the central area (El Cangrejo, San Francisco North) is at $1,463 ($136/sq ft).
Single-family homes in the San Francisco and Bella Vista areas are being purchased by local speculators who later resell at a higher price to developers who rezone several plots of land for multiple-story condos. Demolition crews are sharing the streets with soil landscapers rushing to end their construction before the deadlines set by property tax holidays.

Panama savings bank sells off properties

The Caja de Ahorros is a government savings and loan bank. This August 11, 2008, the bank will be holding an auction of properties mostly located in Panama City. Unlike another government-owned bank, most have potential for eventual rental to the local market or for developing tourism projects.



Among the properties being auctioned are:

135 m2 / 1454 ft2 Condo in Pelican Bay, 2nd floor, San Francisco section of Panama City, offered at US$112.262

49.1 m2 / 528 ft2 Condo in Plaza Madrid, 7th floor, San Francisco section of Panama City, offered at US$31,247

230.14 m2 / 2476 ft2 Single-family home in 72nd Street, San Francisco section of Panama City, offered at US$216,558 (!!)

Each property is sold "as is" to both foreign and local bidders alike. The last day to receive offers is August 11, 2008 at 9 AM.

For more information on how to bid for these properties, email properties @slampanama.com

Between Mountains and Beach

Situated in the foothill of Campana Mountain, this community offers the best of both worlds with easy access to the beaches and mountains. This exclusive project offers breathtaking mountain views from its retreat holiday villas surrounded by mature mountain trees. This spectacularly located resort is a mere 1 hour from Panama City ensuring that it will be a preferred destination for locals and foreign investors alike, for years to come.

These fabulous villas offer all the luxury features in demand from investors at a substantially more affordable price than similar beach and gated communities in the surrounding area. Offering 3 beautifully designed villas, the Andes, Alpes and Everest, with spacious floor plans and meticulously maintained grounds, residents will enjoy VIP treatment at the fitness centre, swimming pools, ecological path, and Club House in the exclusive social area.

This resort area offers many local services including a supermarket, hospital clinics, veterinarians, and excellent restaurants. With Panama's best golf courses just minutes away, you will also find excellent sports facilities including water skiing, horseback riding, and numerous children's attractions. All of this within a relaxed beach and mountain environment just a short drive to the city.

Key Investment Points:
- Surrounded by high-end beach and mountain communities
- Near favourite ecotourism destinations and urban Panama City
- High resale value due to low density of single-home units
- Investor-friendly landholding corporation regime and 15-year property tax regime
- Just 1 hour from Panama City
- New construction



Two Bedrooms 192m² to 192m² €115,000 to €130,000
Three Bedrooms 211m² to 211m² €129,000 to €144,000
Four Bedrooms or More 278m² to 278m² €179,000 to €194,000
EXPECTED CAPITAL GROWTH UP TO: 10.00%

Consult with your real estate agent.

Ocean views at unbeatable prices

Situated in the up and coming area of Parque Lefevre, this project offers investors excellent value in a great location. Parque Lefevre is located between San Francisco and Panama Viejo, site of the 16th century historic ruins of the old Panama City. Property values are rising in this neighbourhood but will most definitely continue to go up.  Supermarkets, pharmacies, dry cleaners, even a top notch shopping mall are all just a quick 10 minute drive away.

The Prisma condominium will be 14 stories high and offers 3 apartment models ranging from 61 to 87 sqm.  The building will have restricted access with 24/7 security. All apartments have balconies and enjoy a view over the Pacific Ocean or the City of Panama.  The 61 sqm apartment model offers 2 bedrooms and 1 bathroom and the 67 sqm apartment model offers 2 bedrooms and 2 bathrooms.  The 87 sqm apartment will offer 3 bedrooms and 2 bathrooms.  All models have a living room, dining room, kitchen and laundry area.  The social area boasts a swimming pool, events room, gym, children's playground and barbeque. All apartments come with one parking spot. 

Key Investment Points:

- Minutes from downtown Panama City 
- High resale value and demand due to low density of single-home units
- Investor-friendly landholding corporation regime and 15-year property tax regime
- 15 minute drive from commuter airport and Panama's largest shopping mall
- New construction
- Financing up to 70% possible

Two Bedrooms   61m² to 67m²   €50,966 to €60,000
Three Bedrooms   87m² to 87m²   €70,000 to €80,000
 
EXPECTED RENTAL INCOME UP TO: 9.00%


Consult with your real estate agent.  Prices, expected rental income and layout are subject to changes.

Villa in Panama City - next to the rainforest

Single home from € 963,000. Camino de Cruces, Friendship Road, close to El Dorado and new US Embassy. 2 levels, 406 sq.mt., 3 bedrooms, 3 bathrooms, maid r/b, large backyard with pool, surrounded by vegetation. In gated community with 24hr guard. Sold only with furniture.
Call +507 270-0864 or +507 6617-3321.

Features: Roofed Parking, Maids Quarters, 24 hour Security, Laundry, Storage, Garden or Park, Kids Park, Air Conditioner, Patio, Central Air Conditioner, Corner Property, Roofed Garage, Living room & Dinning room
Appliances: Refrigerator, Microwave, Stove, Dishwasher, Instant Hot Water Dispenser, Washer, Dryer
More pictures downloadable here
Google Earth coordinates 9.011289648163606,-79.54334242864977

Plans Lower Level

Backyard and pool

Living room and furniture