Why is Panama Real Estate so Hot Right Now?

Long considered a shipping hub and offshore banking center for the Americas, Panama is enjoying an economic boom on a scale unmatched since the construction of its famous canal 93 years ago.

The country is luring investors and expatriates worldwide, with interest further boosted by the recent approval of a $5.25 billion plan that will double the canal's capacity.

The real estate frenzy is fueled by a strong economy, government incentives for foreign investors, modern amenities, attractive cost of living, world class healthcare options, fantastic recreational activities and a saturated US housing market for retirees. It has attracted speculators and prospective residents from California to Dubai.

These investors are purchasing preconstruction bay front apartments, highland villas, and the latest luxury development from Donald Trump -- a $220 million 65-story residential, office, and hotel complex called Trump Ocean Club, with towers shaped like a yacht sail.

The Panama real estate market is directly linked to the overall economy, which continues to exude stability and growth. Panama will lead economic growth in all of Latin America and the Caribbean in 2007 at a rate of 8.5%, according to an economic study of the region. Jose Luis Machinea, the Executive Secretary of the Latin America Economic Commission (CEPAL), made the announcement in Chile.

A few things including the recently signed United States Panama Trade Promotion Agreement, fuel the growth. The agreement is a comprehensive trade agreement that will eliminate tariffs and other barriers to trade thereby strengthening the century old geostrategic partnership between the US & Panama. The Canal expansion, another major boost to the economy, is expected to bring tens of thousands of new jobs along with long-term incremental revenue for the country.

The Panamanian government has made a point to offer numerous incentives to attract foreign investors. These include new construction property tax exemptions, a very lucrative Pensionado (retirement) program that includes discounts such as 50% off entertainment prices, 25% off airline tickets, 25% off restaurant meals, 20% off doctors' consultations, etc. Panama is also one of the best, if not the best, residency deals in the world today. For the price, the benefits are incomparable. For instance, you can invest $40,000 in a government approved and potentially very lucrative reforestation project. This will yield a visa to the investor, spouse and dependant children.

Panama's modern amenities are similar to that of North America, making life a bit easier day to day. The communications work, you can drink the water from the tap, there's no currency exchange issue, and it feels like home. Visitors and residents alike value the diverse choices Panama has to offer, having the opportunity to escape to a pristine beach but not sacrificing the modern conveniences such as a contemporary road system, high speed internet access and cable television.

Panama has one of the lowest costs of living in all Central and South America: A U.S.-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120 to $160 a month; a beer at a bar costs 35 cents; a cup of coffee, 30 cents; a haircut and shave can cost as little as $2; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; Internet access is $14 a month; wireless is available for a bit more; cellular-telephone service costs about $30 a month plus a per-minute charge of around 22 cents; and cable TV will cost you about $30 a month.

You won't fall short of recreational activities in Panama. With two coasts, there are world-class water sports available such as fishing, diving, sailing, etc. Given its geographic location, Panama is one of the world's best bird watching spots. The jungles of the interior have fantastic rivers to run and fish. The options are endless!

The dream of owning a second home, retiring, or making an investment in a tropical paradise can become a reality in Panama. Whatever your preference, there is something for everyone. Panama real estate is hot right now - don't wait to stake your claim!