Panama Rentals - A Volatile Industry |
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| Written by Matt |
| Wednesday, 03 September 2008 08:27 |
 Ask anyone who's searched, or is searching for Panama rentals in the City and you're likely to get the same sort of face associated with trying to transport a morbidly obese woman by hand: it's a process akin to swallowing a whole pear.
Panama rentals have been around for a while, but only recently have they become as coveted as the Stanley Cup. With a giant influx in foreigners (both to visit and live) the amount of available rental space in Panama has dried up significantly: and with this constriction of supply, has come a hike in prices which, while it won't last for long, is what my grandmother of ninety two years old, might call "a total bitch". Once common, middle-class neighborhoods like El Cangrejo, Marbella, Area Bancaria, and certain parts of Obarrio are now flaunting Panama rental rates not unlike you might find in the United States: with one-bedroom apartments in decent neighborhoods renting for around $1,000-$1,500 and two bedrooms of similar quality upwards of $2,000. Currently, the Panama rental sector is overly priced (more expensive than in many states), in poor condition (many of the buildings are decades old with little repair), and poorly managed (there are very few property management companies in the City). There are several main reasons for the sinking of Panama rentals: 1. Real Estate Boom: As with everything in Panama, housing prices have risen dramatically. With this growth, many once-affordable housing units have been a) knocked down in favor of new high-rises or b) remodeled in favor of super high-end clientele. 2. Lack of Regulation: Now I'm not positive about the legal implications here, but prices seem to have risen far too fast in the Panama rentals market. I know a landlord has certain legal limitations, but the jump Panama rental prices have taken over the past year(s), it's hard to believe any enforcement was present. 3. Rising Operating Costs: As with everything else in Panama, the cost of managing an apartment is rising, fast. Electricity, insurance, taxes...etc. Landlords simply pass these price hikes on to the renters. 4. Old Properties: Many of Panama's once-affordable rental properties are ancient in City-terms. They're falling apart. Because their longtime owners lack the resources to maintain such units, owners tend to offer buildings to big developers instead of maintain them. Only a few years ago was it entirely possible to score a nice, affordable Panama rental in one of these hoods for what seemed like pennies. When I started visiting Panama, I occupied this wonderful unit in El Cangrejo, walking distance to everything, and it ran me a cool $225/month. That same apartment, after recently talking to the shmuck who moved in and tore down my homemade shelving units, now goes for $550/month. "Are they including gold bricks with the apartment now?" I asked. "Does the lease come with some sort of luxury car service?" While there are several Panama rental (property management) companies who offer both short and long term stays, these tend to be more expensive than the traditional "let me look in a newspaper and find myself a reasonable young chap looking to rent his space." These rental agencies tend to cater more towards tourists and corporate clientele. But if you're simply someone looking for an affordable place to live in Panama City, I wish you all the best. I would predict that there may be another year of craziness to this market, before it becomes subdued with a myriad of currently-unfinished apartments then complete.' These sort of changes tend to also be associated with a housing market slowdown, and while renting Panama real estate may not be the "paradise dream" you had envisioned, in no time we'll see the market as a very popular option once again. It will once again become a convenient interim for young people who maybe want to, but cannot yet afford to, buy their own property in Panama. Panama rentals will once again fit the needs of special demographics (single people, travelers, students, refugees) and it will be just in time (if not a tad late) to provide access to the various labor forces attracted to Panama (think Canal expansion, mining, oil refineries...etc). Landlords will soon be then begging for Panama rental occupants, perhaps offering free massages and fresh cookies to anyone who considers a 6-month lease. The selection will attract a new breed of Panama re-locators, perhaps similar to the original crowd that came here for a low cost of living and a high quality of life. Maybe the one good thing about Panama City's high-end real estate boom is that those amenities and luxuries will soon be available at everyday Joe rental prices. Hot tub overlooking the Pacific Ocean anyone? Bring me my massage! Image: portal.oakwood.com/profiles/images/0872/4641/Photos/roppongi_bedroom.jpg
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Comments (4)
  written by Davin Coleman , September 03, 2008 So is the real estate market starting to become saturated?
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 written by Laslandman , September 03, 2008 I am involved in the high-end real estate auction industry in the US and have a rental in the San Francisco area. What is happening condo-wise in Panama City now is eerily similar to what I witnessed happen in Las Vegas, Miami and other US cities. I realize that there is an influx of wealthy people from other countries supporting the Panama City boom now but just like everything else "what goes up too fast, will certainly come down fast as well". Speculators and launderers combined with the global credit crunch/slow down will spare no market. I give it 1 to 1.5 years when prices will be back to a more realistic level. See you at the auction...
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| Last Updated on Wednesday, 29 July 2009 10:41 |
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