For affordable living, Panama is still a great choice…but you’ve got to know where to look.
Monday, May 19, 2008
Read more about Panama in International Living Postcards —your daily escape
I recently received a note from a reader who was searching for a second home in Latin America: “…of course I’ve eliminated Panama from my list,” he writes, “since everyone knows it’s become too expensive. I had my sights set on Panama for years, but from what I hear, I don’t think I can afford it anymore.”
This is a misconception. For affordable living, Panama is still a great choice…but you’ve got to look below the surface.
There is a hidden Panama. A Panama that’s well known to middle-class Panamanians, but virtually unknown to potential expats or foreign property buyers.
I recently attended a conference in Panama City, after which I did some scouting. While working with local residents, expats, and Panamanian agents, I found some terrific values on the property market:
- Apartments in Panama City for less than $70,000
- Prime building lots on the edge of town starting at $25,000
- Beachfront lots on the shimmering Pacific for only $125,000…for almost an acre
- Small beachfront parcels starting at $38,000
- A rolling, green 10-acre farm in the hills of Chiriquí for just $30,000.
These are great buys. Especially when considering Panama’s good infrastructure, quality health care, and its famous retirement benefits package.
And properties aside, I found that the day-to-day cost of living is inexpensive as well. Jessica Ramesch showed me a budget of $1,000 per month that looked reasonable…it even included rent. And I had lunch with an expat who is living a comfortable lifestyle in Panama City on less than $1,200 per month.
The idea that Panama has become too expensive came about because the attention is always focused on the side of Panama that compares to Miami…rather than the Panama that compares to the rest of Latin America.
This high-end side of the market has delivered excellent waterfront and luxury living for years. Rental returns have been good, and the properties have appreciated nicely. It’s the market that’s put Panama on the world real estate map. And while this class of property has risen in price, Panama remains a good value in this category.
But this is not the side of the market that you should compare to the rest of Latin America. If we’re going to compare Panama City to city life in Ecuador, Honduras, Nicaragua, or Peru, we need to step back from the luxury highrises and five-star restaurants, and look at how most middle-class Panamanians really live. Avoid expensive areas like Costa del Este or Punta Pacifica, and instead look to the popular Bella Vista, Bethania, or perhaps San Francisco…as many expats have already done.
In this light, Panama compares favorably to other Latin American countries, and represents a good value for the money, all things considered. Remember, there’s a 20-year property tax exemption, and a 90-day tourist visa for U.S. citizens. The pensioners’ visa is still easy to obtain, while delivering one of the best retirement packages in the world.
Panama’s a good deal right now, and it has been all along. If you’re looking for a second home, an affordable retirement, or a rental property that won’t break the bank, you should still consider this country.
But remember, you’ve got to go deeper…to the hidden Panama.
Lee Harrison
Roving Latin America Editor, International Living
Editor’s note: See the hidden Panama first-hand and up close. It’s going to be a hot topic at our upcoming Live and Invest in Panama event. Our Panama Insider, Jessica Ramesch, constantly has her eye on the most affordable real estate in Panama and will tell you about the latest bargains on the market at the event. Ronan McMahon, executive director of Pathfinder Real Estate, will also be speaking about the best real estate in Panama City and beyond.
Read related articles:
- The Truth About Investing in Panama City
