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Panama City's Low Rent Appeal

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Written by Matt   
Wednesday, 15 October 2008 10:33
Panama Apartment RentalsHow often do you see neighbors gather on a stoop in Punta Pacifica for beers? When was the last time you saw locals in Costa del Este gather in a garage to play music or in the street to play a pickup game of football? High rent districts generally foster complacency and with it a decrease in social interaction. Low rents on the other hand are paired with drive, case spontaneity, and ambition. Both rental markets often happily coexist in great cities around the world, store but in Panama City's near future, only one will inject a new sense of vitality into an otherwise plateauing destination. I believe Panama City's rental market to be hitting its peak. I've listened to many young people who simply can't afford a $2,000/month apartment in El Cangrejo and even more who are disgusted with the lack of quality that represents. Look on any of the classified sites: $6,900 3-bd apartment in Punta Paitilla, $2,500 2-bd in Obarrio, $4,950 2-bd in Area Bancaria "with view". Unless that "view" is directly into the locker room of a strip club, I don't buy it!

It's seriously not feasible, unless you have some really good inside sources or are some sort of magician, to find a decent apartment in a decent location for under $700. Legally, a landlord cannot increase rent to the same occupant by more than 10% per year in Panama. But I think prices have gotten so high because of the amount of turnover -- with old renters leaving, new renters arriving - that landlords jack the prices up between shifts.

The City's current lack of affordable (and centrally located) housing, combined with the imminent surplus of new apartments on the real estate market, logically lead to suggest that soon enough, the rental rates in Panama City will fall and the quality (or ‘bang for your buck') will multiply. No you won't be able to rent a penthouse for pennies, but yes mid-level housing will soon become affordable again and because of that, the City will be reborn.

1. Any dream is possible: When moving to a new country, there's perhaps no better support system to help one acclimate than cheap rent. From a financial perspective, inexpensive apartment rentals permit funds to be allocated to other lifestyle areas such as pampering, entertainment, and travel: providing a number of freedoms that otherwise high rents might restrict and contributing to a better quality of life. From a psychological perspective, low rents give people a stress-free mentality: to focus on what really matters and to do what they really enjoy.

2. New wave of emigrants: Whether they are recent college grads who simply can't afford city living in the USA, or Europeans who's retirement funds can't sustain a quality of life anymore, low rents almost undoubtedly attract, not only a new wave of foreign immigrants, but also hoards of other Panamanians who maybe weren't able to meet the cost of expensive city living in the past. With many Americans losing jobs (or even homes) in the current economic crisis, low rents in Panama will eventually draw them like fat Atkins dieters to a roast beef buffet offering, if just for a moment, the paycheck space to breath once again.

3. Creativity will flourish
: This has something to do with that hungry sense of ambition found in low-rent neighborhoods: think Soho before it's rise to fame. Represented best by artists and musicians, innovation always seems to be at its height in the presence of low-rent districts. Back to poetry slams on the Lower East Side or basement offices in which the business plans for countless Fourtune 500 companies were conceived: inexpensive housing is a breeding ground for great ideas and activity.

One of the main reasons Panama took off not so long ago was cheap housing which allowed young people, old people, and some people who weren't even people at all, to pull a relatively risk-free relocation. It wasn't like moving to Manhattan or London where you'd get eaten alive if you didn't immediately find a high profile job, and it wasn't like a rural village in Africa where you were lucky to have running water and cable. It was a great combination of inexpensive rental prices and modern living that cultivated entrepreneurs and social interaction between foreigners and nationals alike. A combination that ignited Central America's biggest and baddest real estate and tourism boom.

I'm not trying to paint Panama City as a Hemmingway-like think tank, but I am suggesting that the impending drop off of rent prices will re-launch the capital city into a new stratus of development: one based less on grand floor plans or fancy towers, and more on seeds of diversity, originality, and innovation: coincidentally, the same seeds that drew people here in the first place.

Comments (2)Add Comment
great article
written by Wayne , October 15, 2008
extremely well written and cautiously optimistic which i like. you have a talent for writing my friend, whether you are going to stay in panama for the long run or not. i too think that panama city ,while i don't live there, will be reborn in the near future: too much of this real estate craze in the air. people/markets will soon realize what made panama city cool in the first place.
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It's starting already!
written by esteban , October 16, 2008
You can already see apartments (and owners) starting to drop their prices. Why? Simply as you said it: no one can or will rent them at those ridiculous prices. Top that off with the fact that the apartments themselves are archaic in design. What the hell is up with those glass-slated windows? Who/when ever thought that was a good idea for the Panamanian heat/dust????
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Last Updated on Wednesday, 15 October 2008 10:38