Overseas Property World

Tweet

Panama is currently one of the hottest places in the world for investment, especially in property. This is because of the expansion of the Panama Canal which is due to be completed in 2014; everyone knows that the expanded canal will boost Panama’s economic growth massively, and there is growth potential now as people are paying to invest in preparation for this future growth.

The Panama Canal is one of the most important waterways in the southern hemisphere; allowing ships to cross from the Caribbean Sea, and the Atlantic Ocean into the Pacific Ocean without having to sail round the tip of south America, via the treacherous Cape Horn.

Panama’s economy grew incredibly until last year, by 8-10% per year to be precise. This was predominantly because of massive export growth, and growth in the services and construction sectors.

Panama’s services sector accounts for 75% of the country’s GDP, and revenues generated from the operation of the canal and the Colon Free Trade Zone are by far the largest contributors to this. The expansion of the Canal is going to triple its capacity, meaning that the revenues are also likely to triple thus adding masses onto GDP growth.

Because of Panama’s current popularity with investors in advance of its incredible economic future, Panama’s economy is forecast to grow by 3% this year, and 4% next year according to the International Monetary Fund.

It is logical that this growth will accelerate further from next year onwards, because the international recovery will lead to increasing exports and imports around the world. The increasing imports from the US alone will boost revenues from the canal and the Colon Free Trade Zone.

Economic growth like this will mean rising demand for houses and second homes from within the Panamanian population. On top of that: Panama is to Americans what Spain is to Britons; the most popular destination with the buyers of holiday homes and retirement properties. Between rising internal demand and constant demand from American retirees Panama property is easy to sell and there is strong upward pressure on prices.

I calculated that Panama property grew in value by 48% between 2006 and 2008, because of the demand created by the American retirees and the Canal expansion prices are growing even now. Though growth has slowed it is likely to accelerate again as the world recovers from 2010 onwards.

Speaking of prices, there lies another benefit to investing in Panama property; the low prices of property: Luxury resort style 1 bedroom apartments on the emerging coastal region of Chiriquí for £55,000, and chic city centre pads in Panama City for 138,000, both likely to be worth twice that within 5 years. Both properties are currently being marketed by Azure Overseas.