In Panama City real estate, 2019 will be remembered for the introduction and growth of a new generation of high-quality luxury projects that are redefining the local market.
Construction was launched on The Hyde by Wanders and Yoo, which is bringing international designer style to downtown Panama City. On Ocean Reef, the man-made islands in Panama Bay, sales were brisk in the waterfront Beach Club Residences and, more recently, Seascape, the first luxury development in Panama City focused on wellness and a healthy lifestyle for residences. Meanwhile, the Ritz Carlton Reserve broke ground on Pearl Island, promising a true 5-star Caribbean-style retreat off the coast of Panama City.
Each of these projects offers the type of global-level amenities and luxury lifestyle rarely found in the previous generation of Panama City developments. From the artistic design and top-quality materials to the health and wellness amenities, the projects met international standards and promised the type of new lifestyle offerings craved by buyers.
Throughout the city, investors became more discerning, as sales slowed in buildings with lower construction standards and few of the amenities offered by the new projects. Rental yields became a story of the haves and have nots, with older buildings competing for renters based on price alone. International media reported on the slowdown, but more discerning analysts noted that the numbers primarily reflected the performance of the Class B and Class C projects that were unable to compete with the newer, high-quality developments.
In many ways, it was clear that 2019 marked an important step forward in the maturity of the property market. Instead of large fluctuations, the market continues to grow, with the best properties commanding the top prices. Investor activity remained strong, as the international community continued to view Panama as a safe haven.
At the same time, 2019 was an important transition year for Panama. It started with the international spotlight on Panama as the Pope visited for World Youth Day, the biggest single event in Panama history.
In May, centrist rancher Laurentino Cortizo won the Presidential election, promising to fight corruption and instill new energy into the business sector. Before and after the election, the economy continued to surge, fueled by large infrastructure projects and the expansion of the Panama Canal, with GDP annual growth once again expected to hover around 5 to 6 percent.
Meanwhile, foreign investment continued to flow into the country, with China’s role expanding. President Cortizo signaled that he would continue to develop the relationship with China while maintaining strong ties to the United States, which was taken as positive news by the economic community.
Cobre Panama, the massive mining conglomerate, battled legal issues, but still managed to officially start production, which will pump billions of dollars into the local economy. The mining operation is the type of large-scale operation that generates its own infrastructure, including a need for housing for its executives and customers.
There were many events in 2019 that pointed to the future ahead. The third bridge over the Canal opened in August, changing the dynamic of traffic on the Atlantic side of the Canal. Meanwhile, work progressed on the fourth bridge, which will be closer to Panama City and include an extension of the Panama City metro. The second line of the metro opened in April, signaling that the planned network is continuing to develop and it will have a significant impact on local transportation.
Meanwhile, more resources went into developing Panama’s tourism, including more international advertising. Tourism is still seen as the under-developed giant of the local economy. In 2019, Copa Airlines continued to expand its routes and began offering more stay-over packages, which introduce Panama City to a new generation of travelers.
For us at PPR, it was a great year of advancement and accomplishment. Our sales team grew and we found new ways to improve our customer service. We expanded our use of virtual tour software for displaying properties and formed an alliance to launch SAP business management software and take our property management business into the next decade.
As 2019 closes, we appreciate all our friends and business partners. It’s been a great ride and we look forward to the next decade of growth in Panama real estate.