Panama City’s Casco Viejo “A Cultural Cornerstone” Says New York Times

Panama City’s Casco Viejo neighborhood is receiving more praise as Panama City’s hottest neighborhood and was called “a cultural cornerstone” rivaling Miami’s South Beach in the New York Times. Panama City’s up-and-coming historic neighborhood has attracted the attention of international media outlets. Last month Casco Vieio was featured in an article in The Guardian. The Times article describes the neighborhood as conjuring images of Havana, yet bursting with energy as historic colonial buildings are being renovated and converted to luxury apartments and boutiques.

At a time when other real estate sectors are slouching, Casco Viejo provides interesting opportunities for real estate and development, particularly for anyone willing to take on historic preservation and reservation.

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“Is The Panama City Condo Market Going The Way Of Southern California?” Asks “The Panama Report”

 A recent post in The Panama Report investigates the current condo market boom in Panama City. The author of the article, a real estate development consultant based in Panama City, discusses the fundamentals of the condo market in Panama City, which have led him to conclude that the market may be on the verge of busting. Many condominiums are now selling between $300,000 and $600,000, with a median price per square meter of $3,000. The author worries that as banks in Panama become more conservative with loans in response to the conditions in the United States, it is likely that developers are going to take the brunt of the damage as speculators fail to make payments. Most deposits on units range from 10 – 30%, meaning many developers could be left with 70-90% of the cost if investors begin to back out of the market.

I have to say that I agree with what Mr. Quesada warns of in this article, and admit that I would be pretty nervous if I was developing upscale condominiums in Panama City right now. I do have a few caveats though. While I do think that there are similarities between the current situation in Panama City and in the United States several years ago, there are several important differences. Unlike the United States, Panama does not offer mortgage backed securities. While this will tighten lending in the country and decreases liquidity, it should prevent the bubble from becoming too large too fast as it did in the United States – particularly as it did with the subprime mortgage mess.

 Another potential factor in Panama City’s condo market are European investors. Depending on how the euro and pound sterling fare, Panama City could continue to be a relative bargain for Europeans. While the infrastructure in Panama City still lags behind cities such as London or New York, the cost of living is not likely to be quite as expensive as these cities.

There is no doubt that the condo market in Panama City is likely to cool off in the near future. Yet the city continues to be promising as a long term investment, particularly once the bubble begins to deflate and a better price equilibrium is reached in the market.

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CNN On Panama’s Pearl Islands: “A Beach Bum’s Paradise”

Panama’s Pearl Islands were recently featured in an article on CNN, and were described as a “beach bum’s paradise.” The Pearl Islands are located 30 miles off the Pacific coast of Panama in the Gulf of Panama, and can be reached via a short 20 minute plane ride from Panama City. The tropical islands were the location of three seasons of the American television program ‘Survivor.’

The Pearl Islands, which are said to have been stop off point for Spanish Conquistadors on their way to bring treasure back to Spain, are now the location of many wealthy Panamanian’s vacation residences. The Pearl Islands were briefly the home of the Shah of Iran following his exile in the late 1970s.

The author visited Contadora, one of three islands in the archipelago that are accessible by plane, and Mogo Mogo, a deserted island used to film seasons of ‘Survivor’ (which is still used as the location to international versions of the show). The Pearl Islands feature pristine beaches, fantastic snorkeling, and chance run-ins with television crews.

For more information the CNN article can be read here

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