As we start the new year, it’s always a good time to look at the factors shaping the Panama property market. No one has a crystal ball to predict the future, but we can analyze the key elements and see that there are several big news items on the horizon that will surely impact the industry in the decade ahead.
For investors, home buyers and renters, here a few of the big stories to watch in 2020.
Two long-delayed projects will open in 2020 and provide a huge boost to tourism. The first is the expansion of the Tocumen International Airport and the Norman Foster-designed new terminal. Tocumen is already firmly established as the “Hub of the Americas” and the growth will allow a significant growth in flights to the city, as well as connections to other destinations. Copa Airlines is ready to implement a new short-term stopover policy, which will allow thousands of travelers to experience the city for a few days before flying to their next destination.
Meanwhile, the new convention center will finally open on Amador Causeway, moving the city’s convention business into the big leagues. And the new cruise terminal on Amador should also be ready to start operation, which will bring even more travelers to the city. To help support the initiatives, Panama Tourism is expanding promotions around the world.
Tourism is the best advertisement for the property industry. The more travelers in Panama City, the more potential buyers, and renters.
In 2019, we saw a separation in the market, as investors focused on top-quality projects. Sales in older buildings without amenities suffered, dragging down prices. New buildings with top quality designs and loads of amenities actually sold well and commanded strong prices.
This year, we don’t expect to see any overall rise in prices, but we expect the number of sales to increase, as more business and leisure travelers experience Panama City for the first time. The competition will increase for top units as demand starts to catch up to supply. In 2020, we expect to see more signs of maturity in the market, as prices and sales stabilize a steady stream of new offerings hit the market.
This is one of the most exciting projects in Panama and it will have a direct impact on Panama City real estate. The government has announced a $120 million initiative to bring beaches back to the heart of Panama City. The concept calls for the return of Caledonia and Bella Vista beaches, in front of Avenida Balboa. The beaches will link to the Cinta Costera and create the type of urban beach that can be found in cities like Rio de Janeiro and Barcelona.
This will be the year to track progress on the project, as well as focusing more attention on other waterfront projects. The development of this key asset will change the dynamic of the city and boost property values, especially of apartments within walking distance of the water.
The next year should see dramatic steps forward for some of the largest infrastructure projects in the region. Work is likely to begin on the third line of the Panama City metro, as well as the fourth bridge over the Canal. The third bridge was completed on the Atlantic side of the Canal last year and the fourth bridge will include room for the metro, which will dramatically improve links between the City and the West.
Panama is also on the list the benefit from the Growth in the Americas program established last year by the United States, which plans to invest billions in energy and infrastructure projects. Infrastructure projects fuel growth, create jobs and translate directly into a larger pool of buyers and renters.
The Cobre Panama copper mine operation officially started producing in 2019 and it should dramatically ramp up production in 2020. By government estimates, the mine could produce up to $2 billion a year in revenue, which will provide a huge driver for the country’s economy.
Coupled with the additional revenue generated by the expansion of the Panama Canal, the mining operation will drive significant GDP growth. International economists expect the economy to increase by more than 5 percent in 2020, which will provide a nice foundation for the growth of the property market.