As an investor it is important to consider the growth potential of your chosen property in Panama and understand exactly what drives this growth.
In the light of major service sector investment, real estate investors are enjoying strong growth in investment property in Panama, both in the commercial and residential markets.
Panama’s GDP growth has surpassed all projections and in the first three months of 2007 it reached 9.4%. This phenomenal growth, the fastest growing in all Latin America, is largely due to the government’s multitude of tax incentive schemes, and increased activity in major sectors such as construction, transportation, the Panama Canal port, and tourism. Shrewd investors are capitalizing on this success and supplying the high demand for property in Panama.
Tourism alone is the largest single industry in Panama and has been the fastest growing industry, increasing at an average rate of 10.7% since 1997. The construction of accommodation to support such growth has had a positive knock-on economic effect as well as created lucrative buy-to-let investment opportunities in prime tourist locations.
Today, investors can reasonably expect capital appreciation to reach 20% per annum in prime Panamanian locations, such as the City centre and popular tourist resort areas.
The ongoing arrival of major international businesses and financial organisations, along with a surge in related economic activity, gives rise to a strong demand for rental property particularly in Panama City, often to accommodate the increased numbers of multinational professionals seeking top quality property in or near the business district. In high demand areas, rental yields have been reaching approx. 8% per annum.
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