It couldn't be better

It's one of the safest and most exciting cities in Latin America and offers great value for money - no wonder Panama City is ranked among the world's top destinations, says Amy Grace.

City pads rarely come with the kind of package this capital city offers – a rich, historic centre, superb Caribbean beaches, rugged mountain ranges and tropical rainforests. It has the lot – and no earthquakes or hurricanes; something no other Central American country can claim. It’s also one of the safest and most stable destinations in Latin America and, thanks to its warm climate and cheap cost of living, it appeals to young bankers and baby-boomers alike.

Famous for its busy canal and as a tax haven, it’s one of the latest hotspots forproperty investment – apparently safe even in turbulent economic times. Despite a recent clip of 3.4 per cent, the government claimed last month that the economy continues to thrive, and investment forecasts for this exciting location, already popular with the US market, are excellent. It has a booming tourist industry, which is boosting the economy and the rental market, though demand for high-quality properties has led many developers to promote property before building permission has been granted; something to be wary of, as some investors have been left waiting for a refund on a property that cannot be delivered. However, despite the excitement and enthusiasm to build, some say the area is an economic miracle.

Whether you’re thinking of buying for investment or lifestyle reasons, Panama City offers many advantages, including 0% property tax on selected developments, and 0% tax on income earned offshore. It has long held an attraction for Americans, Europeans and South Americans as English is widely spoken. Properties here are designed with the North American market in mind, and so they’re far more spacious than similar properties in the rest of the world, and represent excellent value for money. Of course, with the falling value of the pound, property in Panama isn’t such good value as it was six months ago.

Deane Roe, Account Manager for foreign exchange specialist Moneycorp, points out that a $200,000 property in Panama would have cost just over £101,000 in August last year; today that same property would cost £140,000. He says, “It’s not all bad news though. If this current trend of risk aversion continues, and investors continue to run to the perceived safety haven of the US Dollar, we could see the GBP v USD rate drop to as low as 1.3, so if you’re sitting on the fence, maybe now is the right time to buy. For some UK buyers, there may be some mid-term relief with the USD rate rising to the lofty levels of the 1.50s by the third quarter of 2009, should this risk aversion start to unwind.”

Read the full article in our April 2009 edition.