Panama property development 'hit by credit crunch'

Development of property in Panama is decreasing as a result of the credit crunch limiting the spending power of construction firms in the country, it has been claimed.

According to the Panama Star, many projects have been either scaled down or stopped completely due to a lack of buyers, with the high-end real estate market being particularly badly affected.

And as a result, many buyers who invested in apartments in the country in order to make a profit may find themselves with a shortage of buyers.

Housing minister Gabriel Diez told the news source that "luxurious condominiums" were mainly targeted by foreign buyers, who are no longer seeking to purchase homes in Panama in the current economic climate.

However, he expressed optimism for the market in the future, stating that the impact may be reduced if developers switch to constructing low-cost homes.

The news signals a shift from the positive outlook the Panama market experienced in late 2008, when a Daily Telegraph report noted that "straightforward" acquisition of property in the country was making it popular with investors.

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