Panama Investor Blog

Home prices, sales continue to fall in South Florida

Here is an article from the Florida Sun Sentinal which has some interesting statistics on the number of homes sold and the median prices of both homes and condo's in South Florida. The realtors in South FLorida have seen their heyday with 5 years of incredible growth fueled by speculators. Now they have to find a way to pay for the lifestyle they had become accustom to.

By Marcia Heroux Pounds
South Florida Sun-Sentinel

December 28, 2006, 1:03 PM EST

Sales of existing homes and median prices in Palm Beach and Broward counties continued to fall in November, compared with November 2005 , the peak of South Florida's five-year housing boom.

Panama City infrastructure council proposed

This small, but important announcement was in the local press this week. Maybe my developer friends are wising up to the acute infrastructure issue they will soon be facing.

Panamá, jueves 28 de diciembre de 2006

Impulsan consejo de infraestructura

CALLES. Para permitir el desarrollo de las infraestructuras necesarias para mantener el crecimiento sostenido de las ciudades, el sector privado propuso al Gobierno Nacional la creación del Consejo Nacional de Infraestructura. La solicitud fue promovida por la Cámara Panameña de la Construcción.

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Panama, Thursday 28 of December of 2006
To Promote Infrastructure Council
In order to allow the development of infrastructures necessary to maintain the sustaniable growth of the cities, the private sector proposed  the National Government the creation of the National Infrastructure Council. The request was promoted by the Panamanian Chamber of the Construction.

Panama's overbuilt condo market starts to fizzle

This Reuters headline actually reads "Florida's overbuilt condo market starts to fizzle " but I could not help but put Panama instead as it will surely follow the same fate in the not too distant future. The brief story is a foretelling of the future in store when the speculative buying ends and the reality sets in.

excerpt:Developers have pulled the plug on some of Miami's most anticipated condominium developments, a sign the city's sizzling, speculator-driven condo market -- where prices of many apartments doubled or tripled in a few brief years -- has finally chilled.

"This market was too good to be true," said Lewis Goodkin, a Miami economist and real estate analyst. "But it was a market fueled by speculators, so it wasn't a true market."

The blame game begins

Last weeks announcement of the Bahia Del Pacifica's demise has prompted a number of articles about the project in the local press. The architect is refuting the claim of the developer that the design was flawed and impractical. The accusations will fly, but the real question is, will the developer return all of the deposits made by the speculators or will he find excuses for not returning the funds. We will be watching this unfolding story with great interest as it is one of a number of projects that we expect to "bite the dust" in the coming year. Let the games begin!

Panama on the rise

Accurate article from the Boston Globe about the construction boom in Panama.
Worth the read...

Construction, global interest booming, eclipsing long-range worries

By Indira A.R. Lakshmanan, Globe Staff  |  December 27, 2006

PANAMA CITY -- Long a freewheeling shipping hub and offshore banking center for the Americas, Panama is enjoying a building boom on a scale unmatched since the construction of its famous canal 92 years ago.

The country is luring investors and expatriates worldwide, with interest further boosted by the recent approval of a $5.2 billion plan that will double the canal's capacity.

Not everyone is happy about the invasion of retirees.

Not everyone is happy about the influx of foreign retirees here in Paradise.
This cartoon was posted in La Prensa this week.
The caption reads:
Panama is Paradise for the Foreigners
No wonder I am doing so bad

Blue sky or Paridise Sky?

Cielo Paraiso (Paradise Sky) is an ambitious master planned project which includes an 18 hole championship golf course, 72 room hotel and country club. The project is located about 14 kilometers from Boquete towards an area called Las Estrallas. (The stars). The Project is being developed by a Canadian and his wife, Raideep and Colleen Lal.
The project was announced several years ago and there has been considerable work done on the property. This is an important project for Boquete as it will bring many more new residence (200+ homes) and a significant amount of economic benefit to the community. I sent an email to their sales manager , Joerg Senna, asking him some questions about the progress they have made. Here are my questions and his answers.

Panama public debt reaches 10.88 billion dollars

And that's before the canal expansion. The interest on that debt is staggering for a small country with only 3 million inhabitants.

Panama Public Debt Increases

Panama, Dec 21 (Prensa Latina) The Panamanian public debt has hit 10.88 billion dollars, an increase of 1.7 billion in relation to September 2004, when Martin Torrijos became president.

An Economy and Finance Ministry report informed the debt has increased 148 million dollars since October.

Panama owes 815.1 million dollars to Treasury bond holders and 429.8 million to bill holders, 10 million and 12.6 million more than in November, respectively, the release revealed.

The text specified that global bond holders, the Inter-American Development Bank, and the official bank are the Panamanian State s main creditors.

The decision by the Panamanian government to privatize state assets to theoretically reduce the national debt has provoked protests from numerous experts.

The issue emerged after publication of a letter from Economy and Finance Minister Carlos Vallarino to World Bank President Paul Wolfowitz telling him the State has assets that could help reduce the debt.

Housing slump stalls master planned project

The largest master planned project in America for retirees is having trouble selling homes due to the slump in the housing market. The bottom line is that many who want to sell their homes in the north find no market and can't afford to move to the new community. I believe this story will be repeated over and over as the stall in home sales affects everything.
How will it affect Panama? In Boquete we have seen a slow down in the number of people coming to look at property. Real Estate operations outside Valle Escondido are having a tough year compared to last. There are still people coming because of the low cost of living, but fewer are able to sell their homes in the U.S. in order to have the funds to buy. We are just heading into the U.S. winter travel season and we all expect things to improve. I will let you know in a few months!

Big project bites the dust

Last week I posted an article from La Prensa stating that the Pacific del Bahia had been delayed but started again. Now an article comes out stating they have stopped the project due to problems with the architectural design and soil in the area. Which ever it is it is not good for Panama's reputation.  This may be the first of many that never see the light of day. Although they have stated they are returning the money put down by the  investors/buyers, they are not paying them their expected return on investment and the lost opportunity. Be careful what you invest in!

BALBOA Ave.
Palacio de la Bahia project is in danger
LA PRENSA
Mario To Muñoz andresm@prensa.com
The skyscraper Palacio de la Bahia will not be constructed with the 97 floors and 350 meters of height as it were predicted. The promoter of the building, Adolph Olloqui, explained that technical aspects make the project is not fesiable. For that reason, he terminated the contract with the architect who designed it and is arranged to recognize the rights of the investors who bought apartments whose cost was of up to a million dollars.
One of the reasons in that it is based the decision of Olloqui is that in the place where the project is located they cannot build the seven basement that the design anticipated, as well as either is the necessary space for the amount of parking that would require a structure with about 300 apartments. The Balboa Ave. has been product of a filling constructed for more than 50 years.