SPECULATORS FACING HARD TIMES

Panama’s real estate bubble nears the end

Many who rushed in to buy and flip condos can’t find buyers

MARIJULIA PUJOL LLOYD

Jesse Levin, managing director of Archer Group Investments thinks that Panama has the best infrastructure in Central America, apart from having the dollar and political and financial stability, the country has an ideal geographical position to travel to the United States.

But he believes, along with others, that the real estate market bubble has already burst.

Until recently young foreigners use to come Panama to buy apartments and condos to be flipped and sold at profit, before the buildings were even completed.

The speculators pushed the prices up. killing the dreams of local Panamanians looking for a reasonably priced home.

Now there is an over supply with not enough well healed buyers looking for a home.”

“That it is exactly what happened in Miami, which was overbuilt.

Currently Panama City alone has 35,000 to 40,000 units coming on to the market in a country that only has 3.3 million people. Nobody is buying and there are many desperate sellers trying to get rid of their properties, before they have to pay the rest of the money they owe to the developers,” said Levin.

“What are we seeing now is empty buildings, obscuring the skyline. Speculators are partly to blame, because prices are not as good as they used to be. They went up way too quickly, which is bad for everybody,” added Levin. “I believe they will fill out eventually, once the prices decrease and adjust to the market. There could be Venezuelan fleeing the Hugo Chavez’s regime or retirees who cannot afford to live in the States or Russians. Panama continues to attract a lot of people.”

According to the real estate agent, not everything is doom and gloom.

The rental market is doing very well, mainly encouraged by foreign companies moving to Panama. There executives need housing and they are happy to rent but not to buy.

The sale of commercial and logistic properties is doing well and the same can be said about land in interior, where bargains can still be found. “The danger exists in overdeveloping the country, which could ruin Panama’s main attribute its natural beauty,” Levin said.

He also expressed concerns about the stability of many of the city’s high rises.

Reflecting about what might happen to abandoned structures, Levin said: “Let’s hope that yhere is no earthquakes happen in Panama any time soon, because they will tumble down.

They do not look very safe. There is no steel anywhere and the safety regulations are very poor.

“I don’t see how can you build a 30 or 40 storey building without steel. I worry about their longevity and the strain they put on the city’s infrastructure.

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