FINANCIAL CRISIS HITS TOWN

Real estate boom starts deflating

12-17-2008 | MANUEL LUNA G.

mluna@laestrella.com.pa

Investments in the construction sector were down by 35 percent in September and 78 percent in October compared to last year

Panama Star PANAMA. The global financial crisis has started to put a premature end to the construction industry boom in Panama, and in 2009 the fall of this important industry is expected to be more pronounced. The local market has reached saturation point, and demand for new projects is falling.

As proof, in the month of September, investments in construction projects were down by 35 percent, compared to September 2007. The sale of projects in the month of October fell 78 percent compared to statistics for October 2007.

A study by the economist Osvaldo Lao for the Panamanian Association of Real Estate Agents and Promoters revealed that housing sales reached 1,766 in October 2007, while the number fell to just 438 this past October, the lowest monthly figure in the last two years. In housing complexes that cost less than $80,000 the fall was 75 percent.

For units costing more than $80,000 the fall in sales was 80 percent.

The housing sector of less than $80,000 proves to be the most marketable, with a turnover rate of less than 10 months.

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