"Many of my clients have commented on Panama's fragmented real estate listing environment, which makes things very difficult for an uninformed buyer to find top properties in upscale locations, because these properties rarely make it on the market," Mr Davis wrote. Currently, the top properties are being transacted through an "elite and oftentimes closed network of real estate agents, attorneys, developers and private connections".
However, this isn't the only challenge facing overseas buyers in Panama, as the domestic market is heating up. Panamanians are using their own government contacts, attorneys and local affiliations to ensure they have the first bid on high-end property. Mr Davis explained that there are certain buildings and neighbourhoods controlled by a select group of families. With no connections to these families, foreign investors are struggling to find a way into the market.
Nevertheless, people shouldn't be put off buying property in Panama. In fact, the country has no restriction on real estate ownership for foreigners, excluding article 121 of the Panamanian Tax Code. This states that overseas buyers or Panamanian corporations with foreign ownership cannot purchase property located less than ten kilometres from the frontiers, not islands under the jurisdiction of Panama. However, overseas buyers can enter commerce or industry without limitations.
Total transaction costs are also low in the in country. According to the Global Property Guide, legal fees stand at around two per cent, while registration and transfer tax are 0.25 per cent and two per cent respectively. Buyers generally pay costs of around 2.25 per cent.