PPR Q4 Panama City Property Market Report
The second half of 2022 saw a continuation of many of the positive real estate trends we saw in the first half, with steady demand for sales and rentals.
Overall, sale prices continue to rise in the luxury section with private sellers and developers showing less flexibility in negotiating listing prices. Many of the buyers have been investors, targeting the strong rental market, where occupancy rates moved above 90% in many buildings, reaching levels that haven’t been seen in years.
Many factors drove sales and rentals, including the turmoil in financial markets around the world. Panama City represents an attractive alternative for investing and living, with its rebounding economy and strong infrastructure. New visa options for investors and remote workers have also provided a boost to the market.
In the second half of 2022, we noticed several specific trends and developments.
- Developers launched a few pre-construction projects, which posted healthy absorption, such as the Oceana development in Santa Maria which PPR helped launch in conjunction with the developer Grupo Los Pueblos. The project is seeing strong demand from end users and investors, who are responding to the quality of the development with a wide array of amenities.
- There has been a significant price shift in the Ocean Club, the bellwether Punta Pacifica tower, with high-floor inventory growing scarcer. Prices rose 5% to 7% for highly coveted 1- and 2- bedroom units with unobstructed views. PPR is aware of approximately 50 transactions in the Ocean Club in 2022, with average prices for 1- and 2-bedrooms ranging between $330,000 and $550,000.
- Rental prices are also seeing price upticks as vacancies dry up in the most sought rental buildings, such as Ocean Club and Yoo where PPR is seeing occupancy rates break over the 90% mark for the first time in years.
- There has been a significant increase in commercial and retail activity in Ocean Club with the opening of several restaurants, including Petit Paris, a French cafe; the British-themed @work Cafe; Lima, a Peruvian cafe; and Bellas, a steakhouse. The restaurants provide a significant new amenity for Ocean Club residents.
- More and more potential buyers are visiting Panama City and renting for 45 to 90 days to research the market before pulling the trigger on a purchase. PPR’s exclusive 45-day rental program was a popular alternative in the second half of 2022, offering top-quality, turnkey units in the Ocean Club and Yoo.
- Digital nomads continue to flock to Panama, mostly seeking rental options from 45 to 90 days. They are taking advantage of Panama’s short-term visa and solid digital infrastructure, which makes Panama City, a perfect remote work destination.
- For developer sales, Ocean Reef still dominates the luxury market with almost all new projects sold out prior to construction. PPR’s Ocean Reef Signature Resort Collection. Recent projects such as Skyhomes and Casa Del Mar were 100% sold out prior to the start of construction.
- A new Skyhomes collection development on Ocean Reef, the ultra-luxury Ocean Terraces, with prices averaging more than $2 million, was launched with great success. There is only one residence remaining for sale with construction projected to begin in Q1 of 2023. The launch of the Palms Beach Resort on Ocean Reef met with similar demand; its first phase is over 80% sold and the second phase is over 60% sold
- The highly anticipated Wanders and Yoo, as well as the existing Yoo tower on Avenida Balboa, also saw a significant uptick in sales to investors banking on strong rental ROIs. The existing Yoo continues to experience strong rental demand, which should translate nicely to the new Wanders and Yoo, which is expected to open its first tower in early 2023.
- The Regent in Costa del Este has become both the rental and sales darling for 2022. PPR’s portfolio of 45 apartments in this highly amenitized, gated residential resort is currently running at 99% occupied. Demand was primarily driven by multinational executives seeking great amenities within walking distance of their offices.
- Sales have also been on fire at The Regent, a Costa del Este, a 55-story tower with a wide array of on-site parks and sports facilities, including a soccer court, a fully equipped gym with a boxing ring, a tennis court, and a sports bar. PPR was involved in or aware of more than 75 sales in 2022.
- We have seen an uptick in sales from end users from the U.S., Colombia, Peru, and Chile at the almost-completed Pacific Point Tower 400, the newest building in Punta Pacifica. PPR has been involved in several 3- and 4-bedroom sales, including a breathtaking 7,000-square-foot, a two-story penthouse that sold for more than $2 million.
- The luxury golf course community of Santa Maria is another area seeing a resurgence of demand across the spectrum, from large free-standing homes to highrise options like La Maison by Fendi Casa. We also saw steady sales in the boutique, amenity-heavy Ocean House, which offers price points in the $300,000-$4000,000 range.
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