by Duncan McGowan
For investors tracking Panama real estate, the progress of several key storylines in 2018 will provide a barometer for the state of the market.
The projections suggest this will be a big year for Panama, as it grows as the “Hub of the Americas.” Panama’s economy is expected to expand by 5.5 percent in 2018, according to the World Bank. Meanwhile, the government is spending on large infrastructure projects and the number of multinationals with headquarters in Panama City continues to grow, providing key drivers for the property market.
As the year unfolds, these are the news stories to watch:
1. The China Effect
There have been a whirlwind of deals and announcements since Panama formalized diplomatic ties with China last June, including initiatives on infrastructure, trade, and tourism. This will be the year when the talk starts to turn into reality. Watch for big announcements on infrastructure. And tourism should be an immediate beneficiary, now that direct flights have been announced.
2. Cobre Panama Mine
The largest copper mine in the region will be cranking up its operations in 2018 and it should provide a huge boost to the economy. Operated by First Quantum, the mine is expected to generate about $2 billion in exports a year, while creating 7,000 jobs during construction and 2,500 employees during the ongoing mining operation. By the end of the year, the mine could be generating 4 percent of Panama’s GDP.
3. Amador Convention Center
After frustrating delays, construction of the largest convention center in Panama is entering its final phase. The convention center will put Panama in the big leagues in the meetings business, drawing more visitors to Panama and helping make Amador a prime destination for high-end travelers.
4. Panama Tourism
For years, the hotel and travel industry has complained that Panama has been under-promoted on the world stage. That is changing. New campaigns are targeting both North America and Europe, advertising the many different elements that make Panama a very special place to visit. Panama has always been a popular destination but watch for tourism numbers to spike in 2018.
5. Real Estate Price Growth
Prices have been holding steady in Panama City in recent years, especially within the towers of Punta Pacifica. But this is the year when prices should start to rise, as the inventory of available new build apartments starts to shrink. The increasing number of Chinese and European investors should place a premium on top apartments in the best towers.
6. Tocumen Airport Expansion
The “Hub of the Americas” will become a reality as the Norman Foster-designed expansion of the Tocumen International Airport opens for traffic. The terminal is scheduled to open in July and provide an immediate boost in traffic. More direct flights are expected from around the world, and Panama will develop as the connection point for routes around the region. Ultimately the airport is expected to handle 20 million visitors a year.
7. Progress on the Fourth Bridge
Construction of line two and three of the Panama City metro are moving along at a crisp pace, but the project everybody is watching is the fourth bridge over the Panama Canal. The bridge will not only make it easier to travel from Panama City to the beach communities of the west, it will include a metro connection over the Canal. Watch for announcements about progress on the fourth bridge as a sign the future is not far off.
8. Amador Growth
This year will see more results from the Panama government’s $300 million campaign to turn the Amador Causeway into the next great tourist destination. In addition to the convention center, construction should ramp up on the new cruise port planned for Amador, as well as a slew of new infrastructure project. More investors will start to discover the beauty of the Causeway, with its waterfront paths, Canal views and quick access to downtown.
9. Santa Maria Sales
Several new projects are coming online around the Santa Maria Country Club in Costa del Este. Pre-construction sales and continued construction should provide a clear indicator of the international appetite for Panama real estate, as well as the confidence of the financial community in the long-term health of the market.
Duncan McGowan is president of Punta Pacifica Realty, a Panama real estate agency focused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.