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If These Walls Could Speak: Punta Pacifica Pricing Trends They Would Talk About

Whether our clients are drawn to Punta Pacifica real estate by its prime location, elite status, or world class amenities– we find they’re in little need of persuasion when they cross into our office.

The legendary reputation of Punta Pacifica speaks volumes– and the premium quality of the buildings and sophisticated lifestyle is apparent upon any walkthrough. What isn’t immediately apparent, however, are the details surrounding the pricing trends of Punta Pacifica. In real estate, knowledge is power– and we want to arm our clients with the details that are as critical as the glamour of the swimming pool.

If these walls could speak…what would they say? We like to think they would speak of the pricing trends of the years gone by.  (Sure, it’s not romantic– but it is critical.) Since, however, those venerable walls remain silent– we’ll take that upon ourselves to divulge.

After reading this article, you’ll have a more precise understanding of:

  • Punta Pacifica pricing trends of the last decade
  • The underlying forces behind those trends
  • What makes Punta Pacifica poised for growth in 2015 and beyond

Punta Pacifica Pricing Trends

2006 – 2008: Steadfast Growth

This period marked an intensive growth spurt for Panama, with Punta Pacifica surfacing as one of the country’s highest-performing markets. Prices increased and inventory dropped steadily, even as pre-construction units began entering the market.

Any buyer with their heart set on Punta Pacifica in 2006 encountered prices ranging from $1400 per m2 to $3300 per m2. Fast forward two years, and prices swelled to $2000 per m2 to $5000 per m2 – and few were deterred by the increase.

Consumer demand remained neck-and-neck with increasing prices, and inventory continued to shrink. By 2009, 80% of the inventory in Punta Pacifica was already pre-sold– and developers, inspired by the rapid growth, we’re gearing up to build more.

2008-2012: Worldwide Recession

Few real estate markets emerged unscathed from the infamous crash of 2008. While Panama was undoubtedly affected, it still managed to outperform many of the world’s hotbeds for real estate.

Whereas places like Miami, Dubai, and London suffered prices dropping as much as 65%, Panama pulled through the historic collapse floating tolerably around the 25% mark.

With a sizable chunk of Panama’s purchasing power stemming from foreign markets, it’s little surprise that the impact was felt. Unlike the U.S and other nations, however– Panama did not suffer a widespread financial crash. Real estate aside, Panama continued to triumph during the worldwide recession.

Indeed, Panama remained one of the strongest and fastest-growing economies in the hemisphere. While the real estate market felt the temporary depletion of its foreign benefactors, the rest of Panama sustained its remarkable GDP growth, record-low unemployment, and rising middle class.

Thanks to these victories, Panama was partially shielded from the real estate crisis, thus shortening the time it would take to recoup.


2012-2013: Regaining Growth

By 2012, Panama property prices had started to stabilize from the worldwide market collapse. They remained stable for two years until starting to rise again in the first half of 2014.

By 2014, property prices were steadily recovering, with Punta Pacifica bringing in an average range of  $2100 to $3500 per m2 depending on the building (with Trump Ocean Club always holding the high end mark.)

While the real estate arena strived to regain its pre-crash growth rate, other sectors carried on virtually unfazed. Major projects such as the Panama Canal expansion and the Metrorail inauguration continued to advance, and their positive impact could be felt rippling through the economy.

Such a healthy economic climate paved the way for quicker bounce-back within real estate– aided by increased purchasing power amongst nationals, as well as the return of international investors to Panama.

In fact, it was around this time Panama began to soak up some positive offshoots of the impaired U.S market. U.S Investors who were badly burned in the crash had diminished trust for the national market, and piqued curiosities for those overseas. As Panama is considered a top place to invest for foreigners, it was only natural that the enterprising isthmus would garner the attention of those looking offshore.

2014-2015: Back Full-Throttle

With the global market rebounding from recession and Panama continuing to lead the way in annual GDP growth, the last year has shown encouraging growth in Punta Pacifica.

Since 2014, Punta Pacifica property prices have increased by 5% to 7%. We’ve watched prices per square meter rise from the $2,000-2,200 average to today’s figure of $2,500 per m2, or as high as $3500 per m2 for Trump. Sales volumes are also up– by a hearty 35%. In 2015 alone, we expect prices rise an average of 8%.

As to what’s fueling the recent and future growth of Punta Pacifica? We touch on that below.

Poised for Appreciation

 

Having gone through Punta Pacifica pricing trends of the last decade, you’ve probably noticed a pattern emerging. Something about this upscale metropolitan area keeps it a step ahead of its competitors (or, during the 2008 crash, “less behind.”)

So what are these advantages? What has Punta Pacifica so evidently poised for success within the real estate market?

As it turns out, Punta Pacifica offers a rare combination of advantages that other places are hard-pressed to match. While other neighborhoods in Panama City might harbor a few of these advantages, very few buildings outside of Punta Pacifica can claim to hold them all.

  1. A Coveted and Limited Inventory: Apartments in Punta Pacifica are in high demand, representing some of the most coveted in the city. The exclusive neighborhood has very few empty lots available for which to build upon– thus limiting the chance of much future inventory.
  2. The Privilege of Positioning: Living in Punta Pacifica, the most essential and luxurious features of a cosmopolitan lifestyle are all close at hand.The area offers an easy commute to Panama City’s business and banking districts, as well as some of the city’s best shopping malls, plazas, medical facilities, and schools. With the new Punta Pacifica shopping center and office complex under construction, even more amenities are soon to enter the mix.Though all is within easy reach, the developments within Punta Pacifica offer a private sanctuary of comfort and class. With balconies overlooking the Pacific Ocean, residents of Punta Pacifica feel miles away from the hustle and bustle of the city– though when they want it, it’s within easy reach.
  3. Premium Quality Construction: The buildings we represent in Punta Pacifica are comprised of the highest quality of materials; no corners were cut in choosing materials that not only look elegant, but that provide the security, comfort, and longevity any sound investment requires.Our developments in Punta Pacifica are also equipped with their own high-capacity generators and water systems, safeguarding residents from shortages while other parts of Panama City remain vulnerable.
  4. Luxury In-House Lifestyle: In a city in which glittering swimming pools and spacious gyms have become a dime-a-dozen, Punta Pacifica developments truly raise the benchmark for on-site luxury and convenience.Trump Ocean Club, for example, boasts one of the most extensive and worldly collection of amenities you’ll find not only in Panama, but in Latin America. With over a dozen dining options, impressive social areas, a massive gym and all the benefits of a hotel– Trump is an absolute embodiment of why Punta Pacifica is considered such a high-end community.What’s more– recent bond talks have led to a rise in Trump Ocean Club Sales in Panama City– creating unique opportunities for those looking to invest in this renowned building.
  5. An Elite and Distinguished Community: Panama’s global success is due in part to an ambitious and growth-centric portion of the population. Many of those hard-driving individuals are naturally drawn towards Punta Pacifica, thanks to the many reasons cited in this list.As such, Punta Pacifica has surfaced as an elite, enterprising, and ambitious community. Birds of a feather flock together, and the uppercrust of Panama City are flocking to this aristocratic atmosphere of prestige and luxury.

 

Jeff Barton is managing director 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.

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