CNN analyst echos our concerns for Panama real estate market
All the local papers carried stories about the investor forum held in Panama this week. Here they are in English.
Panama, Tuesday, September 18, 2007
Investment opportunities while the RE “boom” fade away
Carlos Barletta cbarletta@prensa.com
The warning of the slowdown of the boom of luxury condominiums in Panama by Darío Epstein, analyst of Economy and Finances of CNN, is nothing new. In the Forum of Investors, last August 22nd, Angelica Bala, Standard & Poors analyst, emphasized the risks of the high prices in the real estate sector, and alarmed that the bubble could explode. The 24th of August, the Chicago Tribune published "you could listen to the air coming out of the bubble of Panama". Paul McBride, president of Prima Panama, said to the Chicago Tribune that the average apartment in the city of Panama is more expensive nowadays than the average apartments in the United States.
Nevertheless, while it is spoken of the end of the boom of luxury apartments, Epstein said the importance of the Government to regulate the construction sector in Panama, to assure the yield of the projects and to prevent an economic crisis.
The opportunities
Epstein says that Panama must promote its geographic position and the education of its people, to attract companies such as Call Centers and multinationals. This proposal of Epstein already is being promoted through Law no. 41 of the 24th of August of 2007, has fiscal incentives so the multinationals establish their regional based in Panama. These, along with the expansion of the canal and the construction of the Refinery, will generate thousands of works for the middle-class, Epstein said. These workers of middle-class will create a new demand for houses, bringing new opportunities for the construction sector, which is due to focus in the local market, he added. Finally, the analyst mentioned that Panama would have to take advantage of its dollarized economy and its banking center, to become the based of Latin America for the purchase and sale of papers of capital markets. This way, many projects that do not obtain financing in banks due to risk, could obtain in Panama, attracting foreign capital to the country.
Panama, Tuesday, September 18, 2007
US mortgage crisis will affect Panama
Carlos Barletta cbarletta@prensa.com
The sales of luxury condominiums in Panama will be struck as a result of the increasing mortgage crisis in the United States, said Darío Epstein, analyst of Economy and Finances of CNN, during a conference by BDO Bustamante & Bustamante. Due to international the financial crisis, the North American and European banks few are willing to lend to investments overseas, Epstein explained, reducing the access to credit of the foreigners who come to Panama.
For the analyst, it is evident that certain indicators of the boom are being fading away. For example, slowdown in sales due to very high prices and the restrictions of the banks establishing a maximum value per square meter in the mortgage loans. However, he indicated that investment opportunities exist so that the aim of the boom does not affect the consumers or the reached economic growth.
Real estate market must analyze demand, Epstein
The Panamanian real estate sector will have to analyze the demand the country has at the moment and the market in which they want to commercialize his products. This recommendation was made yesterday by Dario Epstein, president of the South Investment Co during a conference that organized BDO Bustamante & Bustamente and was attended by economists and bankers. For the expert on economic issues, there is a risk in keep building more apartments per meter for the foreigners. (Panama America)
