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Buying A Property In Panama
Panama, an international pariah in the 1980s thanks to the notorious exploits of ex-dictator Manuel Noriega, has come in from the cold. But is Panama a safe place to put your money in property?
By Gordon Miller
Having ousted Noriega in 1989, and following a decade of tacit US governance, the small nation of around three million people that bridges central and South America has been transformed since autonomy came about in 2000. The formation of a free trade zone and advantageous tax schemes have led the way, luring foreign business investment to the capital, Panama City. The OECD wants greater transparency of the business dealings, but a newly confident nation feels confident enough in its newfound independence to rebuff the financial watchdog's overtures. And well it might. Tourism has increased 200 per cent since the turn of the millennium. The Panama Tourism Authority projects two million tourist arrivals by 2010. Linked by the Panama Canal, itself a tourist attraction, the visitors mainly will head for either the Pacific coast or the Caribbean Sea coast which meets the Atlantic Sea.
The warm waters of the Caribbean are met at their nearest point in Panama on the Bocas del Toro archipelago. Lying less than two kilometres off the coast at their nearest point, the islands are a diverse mix of native Indian, Caribbean, Chinese and Spanish cultures who commingle harmoniously. Over the last decade, a smattering of North Americans and increasingly Europeans have discovered the archipelago and made it their home, or second home. The easy pace of life on the main islands of Isla Colon and Bastimentos have been a major draw. Worldclass sport fishing, decent surfing and sailing have helped too. Inevitably, the influx has markedly pushed up property prices. Richard Kiibler of Island Living Resorts said, 'Since 2006, property prices have risen 30 per cent per annum on the archipelaga; land has increased by around 25 per cent a year over the same time period.'
As to the future? Panama is on an upward curve. The global financial tsunami has quieted the property market locally but has far from tolled its death knell. Tourism has tripled in the last decade, the Panama Canal and the country's attractive tax regimes continue to entice foreign direct investment. Kiibler estimates property prices will increase on the Bocas del Toro over the coming years albeit at slower pace than the last few years. He said, 'I anticipate at least an 8 to 12 per cent capital increase per annum at Emerald Monkey Eco-luxe Resort & Residences for the next several years because there's a limited supply of villas and it will be the best of the best locally. That level of increase in healthy and sustainable; what went before wasn't. Also, Copa Airlines begins flying direct to Bocas [from the US] next year, which will make access to the archipelago so much easier.' The resort is at the vanguard of a new wave of environmentally responsible developments spring up in the region. The nascent 'green' revolution is a sure sign of a country whose property market and international standing is maturing.
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