By Timothy Scott
Recession? Not in Panama City, the “hub of the Americas,” where new luxury high-rise condominium projects are not only still opening, but are selling briskly before the buildings are complete.
There’s one sound that is inescapable in central Panama City, anywhere near the ocean: the sound of construction. From nearly any swimming pool or sidewalk, you hear the banging of steel on steel, the sounds of jackhammers, cement trucks, and workers busting up old walls with sledgehammers. There’s a constant din of activity and the skyline is filled with cranes in motion.
The recession that brought the housing market to a screeching halt in much of the U.S. and Europe never really took hold in Panama, partly because this has been a housing and business market that’s a magnet for wealthy Latinos as much as those from English-speaking countries. Many of the buyers snatching up the best condominiums in Panama City have been Venezuelans looking for a safe place to put their money, and lately Ecuadorians and Bolivians who fear their country is heading down the same anti-growth path. “We love Hugo Chavez,” said Donald Trump Jr. when I met him at the new Trump Ocean Club. “Every time that guy opens his mouth our sales go up.”
Others are just business-minded buyers from Argentina or Brazil who, frustrated with the difficult immigration path in the U.S., have bought in easy Panama instead of Miami. Since most construction and home purchase loans have always been through Panamanian banks, this country was shielded from bad lending practices from the multinational ones like Chase and Citicorp.
As a result of all the continued demand, Panama City real estate is not the bargain it once was, but you have to look at an investment here like an investment in a growth stock instead of a value stock. Jeff Duda, founder of Panama Casa Realty and other local companies, says there are major infrastructure projects adding up to over $20 billion happening in Panama right now. “Panama City is is ideally positioned to become the major business center of Central and South America. It is in an upward growth curve that will last for the next 20 years. There are major master plans for the country and Panama is aggressively embracing growth. When a buyer comes to Panama they need to be looking to the future, what Panama is becoming more than just what it is now. It is an investment in a future that is under construction.”
Compared to other major business capitals, condominium prices here are still reasonable. “Here you can buy a luxury high end apartment for as little as $2,000 per square meter and that is very competitive if you compare it to the cost of apartments or houses in other countries,” says Rina Shacalo, sales manager at Habitats Realty. For a half million dollars, says Shacalo, “You can expect to get a luxury three-bedroom apartment in the best locations in town, finished to the highest standards and the best quality of materials.”
As a ballpark figure, buyers here should expect to pay $200 to $500 per square foot for a prime luxury condo with a prime view of the water. The top end of that scale is a recent phenomenon, thanks to the new Trump Ocean Club, which has trumped everything else in the city and will remain perched at the top for many years. In typical fashion for Trump, it boasts a long list of superlatives and is appealing to buyers who want an easy “best of the best” decision. With more than 1,000 units, the K-Group developer, Roger Khafif, surely lost some sleep along the way, but 880 units were already sold by the time the project officially opened its doors in July of 2011. A few have gone into resale mode as the early buyers’ finances changed, but prices have held steady.
The sail-shaped structure is grand in every way and it boasts two great swimming pool complexes, a 5,000 square-foot gym, multiple restaurants that will vie to be the best in town (helmed by an executive chef from Barcelona), and infrastructure like no other building around: 37 elevators, for a start. The combined residential, office, and hotel project is filling in with retail and eventually a casino, so many residents will probably go for days without ever having to brave the gridlocked traffic nearby.
Although prices are higher than the competition here, it’s easy to see why, from the quality of the finishes to airy public areas to the prestige factor of the tower. Some buyers chose to purchase a hotel condo suite, which goes into the rental pool for hotel guests. “It’s almost impossible to not make money on the rental of those,” says Khafif. “You get what is probably the easiest return on investment in the world.” Most units are 1,500 to 2,000 square feet, but there are plenty of high-floor apartments for those who want more space, the largest being 380 square meters, about 4,000 square feet.
If money is no object, you can find an apartment bigger than most houses in other buildings. Panama Casa Realty has one penthouse listing for $2.8 million that’s more than 10,000 square feet. It has four bedrooms, seven baths, and a garage for five cars. See the details here.
One new development still under construction when we visited (now open) was creating a lot of buzz—Yoo by Philippe Starck. With interiors envisioned by the famous hotel designer, this 56-story, 234-unit will be the most stylish in town and residents will get plenty of pampering amenities, like valet parking and nightly turndown service. Public areas will include a full spa, swimming pools with cabanas, a juice bar, lobby bar, gym, squash courts, and pilates studio. Prices range from $360,000 to $665,000.
Habitats Realty is responsible for sales at that building and many other high-end skyscrapers in the city, including Q Tower, near the Trump project in Punta Pacifica. As with Trump’s, every unit here has an ocean view and these are sized for families, with layouts from 3,000 to 3,600 square feet.