June 26, 2024 by patrickwoolford
Hard Rock International recently received the necessary approval to begin condo sales for their new Hard Rock Hotel Panama located on the Pacific Ocean in Panama. According to a press release I received from a reader earlier this week, this major project will be located in Playa Blanca, and is to include 499 units, a 200,000 square foot pool, two restaurants and a spa. Hard Rock International is famous for their popular Hard Rock Café locations around the world, as well as their Hard Rock Hotels and Casinos. Hard Rock International is a subsidiary of Seminole Hard Rock Entertainment, which is wholly owned by the Florida Seminole Tribe of Florida. The Panama Hard Rock Hotel location is being developed by the Virginia based firm Lago Mar Resorts.
The approval of the Hard Rock Hotel is good news for Playa Blanca, which was already named one of the top destinations to visit this year by the New York Times. The press release for the hotel claims “the eco-sensitive design of the hotel will incorporate Panamanian culture from Spanish colonial to Kuna motifs…” Sounds pretty interesting, if they can pull it off.
The Hard Rock is one of several upscale developments currently being planned for the region, with the posh Nikki Beach Resort scheduled to be completed later this year.
A Hard Rock Hotel has been approved to be built in Playa Blanca (Photo of Las Vegas Hard Rock Hotel from www.wikipedia.org)
Posted in Panama Real Estate, playa blanca | Tagged panama, Panama Real Estate, playa blanca, hard rock hotel panama, hard rock entertainment | 1 Comment »
June 25, 2024 by patrickwoolford
Panama showed a 9.48 percent increase in economic growth this April over the same period last April. This is up from a low 2.2 percent growth rate in March, which marked a five year low for Panama. The growth in the economy was largely due to the strong construction, mining, and hospitality industries, according to the Panama Comptroller General’s office.
While it is good news that Panama’s economy surged forward again this April, the data continues to send mixed signals. March was a five year low for growth in Panama, and the predicted growth rate of 8 percent for the year, while strong, is still a significant decrease from the 11% growth rate Panama enjoyed last year. The data for May will hopefully shed some light on the true state of Panama’s economy, and may begin to indicate how much the decreased consumer confidence and increasing food and fuel prices could potentially impede the growth of Panama’s economy.
Source:
Panama economic activity up 9.48 pct (Reuters.com)
Posted in panama economy | Tagged central american economy, panama, panama economy, Panama Real Estate, real estate investment | No Comments »
June 23, 2024 by patrickwoolford
Despite an economic downturn in the United States, maritime authorities in Panama are projecting a ten percent increase in the number of shipping containers transported through Panama ports in the next year, as reported last week by Reuters. It is predicted that 5.6 million 20-foot shipping containers will be handled at Panama ports in 2024, up from 5 million this year. The number of shipping containers has nearly doubled since 2024, partially due to the increase in demand for raw material from China. China has been increasingly interested in investing in Panama, and has expressed interest in investing in a new mega-port project on the Pacific entrance to the canal. Panama plays crucial role in the Latin American shipping industry, as nearly 40% of shipping containers in Latin America are handled by the Panama Canal.
The projected increase in shipping volume should be good news for Panama’s dollarized economy, which is likely to feel pressure from the current downturn in the United States, and is revealing how much the high demand for goods in China may be impacting Panama’s economy in the future. As China begins to increase its influence in important shipping areas such as Panama, it will be interesting to see what effects this will have on Panama’s economy and real estate markets in the long term.
It is projected that container shipments in Panama will increase 10% in the next year (photo from www.wikipedia.org)
Source:
Panama sees strong shipping container growth (Reuters.com)
Posted in Panama Real Estate, panama canal | Tagged panama, panama canal, panama economy, panama real estate investment | No Comments »
June 17, 2024 by patrickwoolford
News about the real estate boom in Panama City seems to be in never ending supply (making this my third Panama City update this month, read here and here). This week the honors came from the LA Times, in an article they ran entitled “Panama City: A Boomtown With Growing Pains.” The title alone seems to sum up the situation in Panama City well. Yes, Panama City is booming, but will it be a completely painless process? Probably not. The article goes on to discuss the overall positive economic situation of the city, such as the major canal improvements currently being undertaken, which should bring short-term construction jobs to the city as well as bolster Panamas reputation as an international crossroads of goods and services. Multinational corporations such as 3M and Hewlett-Packard are also flocking to set up shop in Panama City to take advantage of the “location and friendly atmosphere” (which is apparently corporate jargon for ‘tax-haven’).
Yet, as the “growing pains” portion of the title from the LA Times article suggests, the arguments for economic prosperity in Panama City are not without caveats. One of the biggest problems facing the growing city is that the growth seems to be outpacing infrastructure development. Traffic congestion is horrendous, the electrical grid is extremely strained, and 6% of the Panama population is without running water. This is not to mention the fact that Panama is still trying to separate itself from its historical reputation as a hangout for corrupt despots, drug lords, and sleazy businessmen.
So what does this mean for real estate investment in Panama City? As a short term investment the city is looking increasingly risky. The speculative nature of the condo market and lagging infrastructure development in the city are worrisome. The canal project isn’t scheduled for completion until 2024, and while the influx of workers should keep segments of the real estate market booming, will these workers be in the market for the multitude of luxury high-rise condominiums currently slated for construction?
Fortunately, as a long term investment the situation in Panama City is looking positive. As multinational corporations continue to move to the city, and the canal project goes ahead as planned, Panama City should be on track to becoming a world class city, and a major regional hub for cargo and telecommunications. Yet given this, you still aren’t interested in weathering the fallout of a potential condo bubble in Panama City? Investing in hotel and hospitality industry is always an interesting possibility… according to the same article a shortage of rooms has caused rates to double in the past year.
Source:
Panama City: Boomtown with growing pains (Latimes.com)
Posted in Panama City, Panama Real Estate | Tagged panama, Panama City, panama city condo boom, panama city real estate, Panama Real Estate | 1 Comment »
June 16, 2024 by patrickwoolford
A recent article stated that a coffee varietal known as Panama Esmeralda Especial Reserva is currently fetching $15 a cup at some United States coffee shops. The coffee, which is available at several locations near Portland, Oregon, is an extremely rare bean called a geisha varietal, and is highly regarded by coffee connoisseurs. According to one website, the bean is grown in Boquete, Panama, a region known for producing high quality coffee beans, and has consistently won taste competitions in Panama since its introduction. The bean is praised for its complex flavor structure, which according to a local roaster exhibits hints of “clementine, key lime, papaya, mango, bergamot, all spice, and high percentage cacao, with a champagne grape finish.” The bean is available in half pound bags that retail in the United States for $100, and make about 8 cups of coffee.
Unfortunately, the current state of the US economy may make it difficult for such an expensive product to remain appealing once the novelty wears off. Regardless of this, the high price point for exotic coffee advances Panama’s position, especially the Boquete region, as an established producer of smaller batched high quality coffee beans on the world market.
Sources:
Coffee shop sells coffee for $15 a cup (Kare11.com)
Stumptown Coffee Roasters
Posted in boquete | Tagged boquete, panama, panama coffee, boquete coffee, geisha varietal | No Comments »
June 16, 2024 by patrickwoolford
Disney Cruise Lines paid the extremely high fee of $283,400 for one of its cruise ships to cross the Panama Canal in May. Cruise lines and tankers are willing to pay increasingly higher fees to avoid the transportation time and costs associated with transporting goods over land or around South America. Slots for non-reserved ships are sold at auction, and help avoid the long waiting period that has recently become common at the canal. These fees are in addition to the standard fees for ships crossing the canal, which are determined by the weight of the ship. The fee paid by the Disney Magic on May 16, while one of the highest ever paid, does not hold this record. Three container ships recently paid a $313,000 fee each for passage through the canal. The Disney Magic is based in Canaveral, Florida, and has voyages between Florida and Los Angeles, with the Panama Canal passage a major draw for passengers.
These increases in fees come amid a slowdown in overall traffic at the canal. The current delay for vessels is now 36 – 48 hours, which is down from a peak of nearly 10 days a few months ago. The average time it takes to cross the canal has also been decreased since March, from over 50 hours transit time to 20 hours. The total number of ships traveling through the canal has decreased 2% in the first three months of 2024, while tonnage dropped 2.3%.
According to the Panama Canal Authority, the decrease in transit time can be partially attributed to making the passage process more efficient. The decrease in transportation through the canal may be attributed to several factors, including the slowdown in the US economy and decline of the US dollar.
Sources:
US cruise ship pays fortune to cross Panama (Reuters.com)
Panama canal transit times fall (Lloydslist.com)
Posted in Panama Real Estate, panama canal | Tagged panama canal, panama real estate investment, panama cruise, disney cruise line | 1 Comment »
June 10, 2024 by patrickwoolford
A recent post on the International Herald Tribune’s blog “Raising the Roof” mentioned a recent report put out by CB Richard Ellis on the condominium market in Panama City. The report, which can be found here, has some interesting statistics related to the current market in Panama City, including the fact that there are currently 204 active condominium projects in the city, and that the average sale price for A-class condominium units rose 12% between 2024 and 2024.
Despite the generally rosy outlook the report describes, there are a few problematic pieces of information that it outlines. For example, the report acknowledges the fact that there has been a slowdown in absorption rate from last year, and that of the 21,710 total units actively being developed only 9,875 are currently under construction. To quote the report:
“Absorption continues steadily, albeit at a slower rate. In 2024, the amount of units on the market almost doubled compared to 2024, while the amount of units under construction grew at a lower rate. This shows that not all the projects have achieved the minimum presales required to start construction, however, Panama continues to be attractive for foreign investors, most of which originate from the United States, Canada, Spain, Colombia and Venezuela.”
I find this information to be particularly troubling, especially given the current economic woes of the United States. The declining dollar, rising fuel prices, and foreclosures in similar California and Florida markets will undoubtedly have an impact on American investors, many of whom will probably be cautious to enter a market that is admittedly fueled by speculation. Depending on how the potential (inevitable?) US recession ends up playing out, it is easy to imagine that the data from this report is showing the tip of the iceberg in a growing downward trend in Panama City’s condo market.
Posted in Panama City, panama economy | Tagged Panama City, panama condo boom, real estate investment | No Comments »
June 5, 2024 by patrickwoolford
The Panama Investor Blog had a useful document on taxation in Panama posted yesterday. The report, which is in .pdf format and published in English, is produced by the audit and tax advisory firm KPMG, and can be found here. The document provides an in depth look at Panama’s tax regime, and how it effects foreign investors in a variety of industries, including real estate and construction.
Here are a few excerpts from the report that may be interesting to real estate investors:
- Chapter 2, which begins on page 11 of the report outlines different the different economic sectors foreign investors may be interested in investing in. Page 20 in this chapter has information on the construction industry, and discusses related tax exemption laws for new construction.
- Chapter 4, beginning on page 39 of the report discusses special economic zones in Panama, several of which provide exemption from real estate tax. Page 45 specifically discusses tax provisions for investing in tourism.
- Chapter 8, which starts on page 87 has information on taxable income on individuals, including capital gains taxes. Chapter 9 discusses other taxes, including real estate tax, which is included on page 100 of the report.
The report provides a solid background on tax laws in Panama, yet given the 2024 publication may now be out of date. Some laws, such as the tax exemption on new construction, have been changed extended and updated since the document was written. As a result, the information in the document should not be taken as legal advice, but instead as a good in depth brief on Panama’s tax regime.
Here’s a link to the Panama taxation document.
Posted in Panama Real Estate | Tagged panama, Panama Real Estate, panama taxes | No Comments »
June 3, 2024 by patrickwoolford
According to an article in The Scientist and a recently published book, “Banana,” by Dan Koeppel (I haven’t read it yet, but I did enjoy his “To See Every Bird On Earth”), the worlds banana supply is currently at risk of being decimated by the fungus Fusarium oxysporum, commonly known as “Panama Disease.” The fungus nearly destroyed the banana industry in the 1950s, wiping out the Gros Michel strain of bananas that had been commonly cultivated for export in Latin America up until then. It was because of this first blight that the modern variety of Banana popular in the United States, a southeastern Asian strain known as Cavendish, became popular due to its natural resistance to the deadly fungus.
The eminent extinction of bananas will have serious implications for many farmers in Panama, who may soon be forced to consider producing other crops
Unfortunately a new strain of the Panama Disease fungus has begun attacking Cavendish bananas across Asia, a situation which is putting the entire world’s supply at risk. Bananas, which are sterile and grown from clones, are particularly susceptible to being devastated by disease, as there is virtually no genetic variation within a given banana population. The disease spread from Asia to Australia, where scientists initially believed they had contained the destructive fungus, yet following a 2024 hurricane spread rapidly on the continent. As a result, Australia’s banana industry has lost 85% of its crop and is now facing collapse.
While the fungus has yet to reach Latin America, scientists say it’s only a matter of time before it does. A single clump of contaminated dirt could easily transport the fungus, potentially driving modern bananas to near extinction. Scientists are currently racing to develop new and genetically modified strains that would be both hardy enough for export and resistant to the fungus, yet this could potentially take decades to achieve. Even if a new varietal was developed, it remains questionable as to whether it would be an acceptable alternative for a discerning general public.
According to the CIA World Factbook, Bananas are one of Panama’s most important agricultural commodities. While agriculture only accounts for 7.4% of Panama’s GDP (in comparison to 80% by the service industry), it employs nearly 20% of the countries labor force. The eminent extinction of bananas will have serious implications for many farmers in Panama, who may soon be forced to consider producing other crops. Panama Disease will surely have a devastating impact on one of the world’s favorite fruits, and will likely change the face of agriculture in Panama and across Latin America.
Bananas may be facing extinction (photograph from Wikipedia.org)
Source:
Banana: RIP (the-scientist.com)
Posted in panama economy | Tagged bananas, panama agriculture, panama disease, panama economy | No Comments »
June 2, 2024 by patrickwoolford
An article published today in NuWire Investor investigates the current construction boom in Panama City, taking a look at how the large influx of condominiums coming on the market in the next few years may make Panama much less appealing as a short-term investment. Nearly 50,000 preconstruction condos are currently for sale in Panama City, with many currently slated to be completed in the next few years. This construction boom has been primarily fueled by speculators, with up to 80% of the preconstruction sales in the city being bought by short-term investors. With only 8,000 new condominiums finished in the past three years, some analysts fear that the rampant speculation may not be reflective of the actual demand for housing in the city, and that many of the projects may run aground as a result.
Panama City has not been the only region in Panama that has been affected by the real estate speculation. Boquete has also seen a slowdown in end-user demand for housing, and has seen a contraction in new development in the region. Despite signs of a slowdown, many remain confident that Panama will remain a strong bet as a long-term investment, given the countries modern amenities and popularity among American and Canadian baby-boomer expatriates.
Read the full article on the panama city condo craze at NuWire Investor
Posted in Panama City, Panama Real Estate | Tagged condominium construction boom, panama, Panama City, real estate investment | No Comments »
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