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Panama’s Department of Municipal Works and Construction halted construction on a real estate development in San Felipe. The barrio is a United Nations World Heritage Site and has strict rules for development that were apparently ignored.

According to the April 7, 2009 La Prensa work was halted on two historic buildings in the Plaza de Independence in San Felipe. They were two of the most famous residences in the Plaza de Independence, San Felipe. According to La Prensa substantial changes were made contrary to laws for development in San Felipe.

This not the first problem in San Felipe real estate development in San Felipe, Panama. The government enacted laws providing for substantial incentives for restoration of old buildings in the old city. As of a couple of years ago is was believed that many people who took advantage of the laws were not developers but speculators who wanted to buy cheap and then sell to a real developer at a substantial profit. Now it appears that real developers were involved but the law was ignored.

We have written before about pitfalls in buying and developing Panama real estate. An issue of a year ago was not keeping up with who else is developing your area. A group of investors planned a housing division in La Chorrera but found out at the last minute that a cement plant was going in next door.

In this case the developers either did their homework and ignored the requirements of the law or they were unaware of what the law was. ABPanama cannot help you if you chose to violate the law but we do keep our ear to the ground and can tell you who else is interested in your area and we can tell you if you need to ask your attorney about rules and regulations where you are building.

Misadventures aside San Felipe is a great place to develop. It is a historic Spanish Colonial city that got left behind as Panama City developed. Now it is having a renaissance. However, in the renaissance one needs to stay true to the original Spanish Colonial construction and in regards to historic preservation laws, consult the right people and follow the rules.

There is a Commission of Archaeological and Historical Monuments in Panama. These people review all real estate projects in Panama where there is a historic concern.

In general Panama is growing despite the recession elsewhere. Of course Panama is seeing the effects of the recession with lower shipping rates in the Panama Canal and fewer North American buyers of high end real estate. However, Panama real estate investment market is broader than the canal or second home buyers from Canada and the USA. Panama expects to grow its economy by about 5 percent in 2009 despite problems elsewhere. This translates into long term appreciation of real estate here. It translates into 2009 being the year to pick up real estate bargains before prices head up again.

Besides residential real estate San Felipe has some great Panama commercial real estate opportunities. As the area develops it housing and hotels there is an increasing need for up scale restaurants, pharmacies, grocery stores, and the like to serve local needs.

At ABPanama we do our homework. We are bilingual and we do business throughout Panama. In the case of commercial real estate we can get you into a property in a great part of town at a great price. If we think that prices will be going down we can get you out with your profits intact.