International interest in U.S. property declined sharply in the last year, according to a new report by the National Association of Realtors. Sales of existing homes to foreign buyers declined 9.6%, to $53.3 billion, and the number of sales fell 14.2% from the previous year to the lowest level since NAR began tracking the data in 2009.
One beneficiary: Panama real estate.
The new data from NAR is “great news for Panamá and its capital Panamá City specifically,” according to a new article from Forbes, the prestigious business magazine. Investors are looking for new options and Panama is the logical choice, according to the article headlined, “Foreign Buyers Are Finally Cooling On America’s Overheated Housing Market. That’s Great News For Panamá.”
There are many factors that make Panama appealing, the article notes. “Perhaps most importantly in today’s market, Panamá City is quickly earning an international reputation for offering more for the money compared with well-heeled real estate hotspots like Dubai, Miami, London, Paris, and New York,” author Peter Lane Taylor writes.
Panama already has a proven track record. “Foreign buyers have considered Panamá in the past,” says famed Miami broker Philip Spiegelman, “So, it’s not like the country’s a dark horse or late to the game.”
Panama has done relatively little to promote itself and raise its international profile, which is why it remains under the radar around the world, Spiegelman notes. “That’s changing now as more information is getting out there,” he told Forbes. “In a turbulent world right now, people are looking at all alternatives and options. And when combined with climate, culture, health care, banking and finance, low cost of entry, and high-value real estate at very affordable prices, it’s Panamá’s time now.”
Many of the factors buffeting the U.S. — sky-high prices, waning buyer interest and historically low inventory — simply are not relevant in Panama’s market today. For international property investors, Panama checks all the boxes. “Panamá’s real estate market is also stable and appreciating, making it an attractive place to invest when other hotspots start to cool,” Forbes notes.
The Wanders & Yoo, the hot downtown development, gets a special call-out. The Wanders & Yoo is “another new architectural icon… whose every material, detail, finish, and furnishing down to the wallpaper and light fixtures was brought to life by Dutch style superstar Marcel Wanders, dubbed the ‘Lady Gaga of the design world’ by the New York Times back in 2011.”
The writer also interviewed Budy Attie, the developer behind the Wanders & Yoo and La Maison by Fendi, who ably captures the city’s spirit.
“Our dedication to fashion, fine art, and design excellence is really what allows us to compete in the global real estate market,” Attie said. “We will always be able to beat in terms of price and value places like Miami and Los Angeles, especially for branded real estate properties like Fendi.”
But the real value proposition goes beyond the price competition, he told Forbes. “The main reason foreign buyers invest here is that they discover Yoo by Starck or Wanders & Yoo together with all of the benefits of Panamá and realize that it’s a perfect location to live and work and run a business in Latin America with access to the global stage,” Attie says.
At PPR, we are seeing the shift to Panama happening in real time. Our clients tell us that the U.S. market is no longer suitable for them for various reasons. Panama offers better opportunities, a better lifestyle and a stable investor market — factors that most U.S. markets can’t offer right now.
We’ve seen the movement in the past and it has the potential to drive the market for years ahead. When investors decide they have had enough of U.S. stocks and real estate, Panama property becomes an exciting and logical option, especially with the current rental activity driving ROI.
The Forbes article gets it right. It also gives well-deserved attention to Panama’s architecture, style and design communities, which are developing a growing international reputation.
“The city’s like a young adult that isn’t begging for attention yet, but knows that it’s about to have its breakout moment,” says Annamaria Zampogna, principal designer at the Panamanian architecture firm, Forza Creativa. “The world is starting to realize that Panamá’s design quality is very high and the high-brow, famous names are all over the place here.”