You are here :: Panama Real Estate » Panama-real-estate » Panama-car

For those looking for economic indicators to guide their investment in Panama real estate we suggest looking at car sales in Panama. According to La Prensa, September 12, 2008, over three thousand cars were sold in Panama in August. Panama lenders issued about 9,000 car loans in the first half of 2008. Cars sales have leveled off as expected after growing nearly thirty percent in 2007.

Panama

Panama is the narrowest point in the Americas where the Panama Canal connects Atlantic and Pacific. This tropical country has untouched rain forest and pristine beaches on both the Pacific and Caribbean coasts. Panama also has a first world infrastructure with the best roads, airports, ports, and telecommunications in Latin America. Panama is currently enjoying an economic boom and a flood of North American retirees attracted by easy residency laws.

Panama Real Estate Investment

Panama has had a flood of North American retirees moving here to take advantage of Panama’s natural beauty, first world services, and real estate prices. In addition to a high end housing industry catering to the needs of North American tourists and retirees commercial real estate has boomed in Panama.

As with any real estate boom there is talk of a real estate bubble in Panama. Looking at other parts of the economy may give some guidance as to where the real estate market is going in Panama.

Car Sales and the Real Estate Market

Strong car sales have mirrored the growing prosperity of Panama’s middle and upper classes. One need only look at Panama City’s streets during rush hour to realize that there are a lot more cars in Panama than just a few years ago.

We suspect that the leveling off of car sales in Panama in August is reflective of a cooling of Panama’s economy. However, car sales dropped ten percent in August; they did not disappear. In all likelihood some of the leveling off of car sales has to do with market saturation. Nevertheless car sales, and real estate sales in Panama, have had a ten year run are due stabilize.

Credit is still available for car loans with banks having loaned $132 million USD in the first half of 2008. Rates have increased to an average of 7.66%.

There is some talk of more diligent checking of credit for car loans which is not a bad thing considering the financial mess that easy credit got the US into.

Panama Real Estate Investment

Using the continuing strong sales of cars an indicator it would seem that Panama’s economic grow remains strong although the boom seems to be maturing into a long term expansion. This bodes well for real estate investment in Panama, especially commercial real estate investment. The housing boom on the high end is still tied to some degree to North Americans and like in Costa Rica may be at risk as credit tightens in the USA. However, the main strength of Panama’s economy tied to commerce is an invitation to commercial real estate investment and will continue to be strong for years to come. With the Panama Canal Expansion project slated to double transit capacity including larger ships trade through Panama has a long term bright future. This bright future includes investment in commercial real estate opportunities in Panama.

If you have an interest in commercial real estate investment in Panama come talk to us at ABPanama where we have over 23 years experience managing real estate portfolios.