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Prices for top-level Panama City apartments increased 8.7 percent in the first half of 2016 compared to a year earlier, according CBRE Panama, the real estate consultancy.

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The CBRE report shows the Panama City market picking up momentum, as demand grows and the supply of quality of apartments thins. The average selling price per square meter for Class A apartments rose from $2,850 in 2015 to $3,100 in 2016, CBRE says.

New buildings are coming on later this year, which should help to increase availability, “which to date is very low,” Eileen Chévez, market research coordinator for CBRE Panama, told Capital Financiero. But even with the new apartments coming online, “sales prices are going to remain stable,” she said.

At Punta Pacifica Realty, we are tracking similar prices. Prices in the high-end buildings have increased 7 percent to 10 percent

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a year since 2013, according to PPR’s data. In the first quarter of 2016 alone, we saw a 20 percent increase in sales from the same period a year earlier. One sign of the healthy market is the return of new construction, which demonstrates the interest 

of international investors. In the first six months of 2016, 1,237 units were added to Panama City’s inventory, which totals 13,877 existing apartments, CBRE reports.

Several factors are driving demand, including the continued growth of Panama’s economy. Panama City is also attracting a diverse group of international buyers, in addition to more activity from Panama’s rapidly expanding middle class.

CBRE also highlights another of the factors changing the Panama City dynamic—the increasing number of investors buying property to rent. Rental rates have remained stable, “as the trend to date is to keep the product to rent it and pay the debt purchase,” CBRE notes.