We just named Panama the #1 place in the world to live in our 2026 Overseas Retirement Index. I’d go a step further and argue that it’s also the best place in the world to invest in property.
This article doesn’t revisit why Panama is attractive in general. Instead, it focuses on why Panama stands out as a real estate investment market, particularly for foreign buyers.
1. A low volatility property market
Panama weathered the 2008-2009 financial crisis far better than most countries. While property prices fell, declines were limited to around 25%. In comparison, markets like Spain and Ireland saw drops of 50% to 70% in some areas.
Ongoing revenue from the Panama Canal and other sources provides a stabilizing force that helps insulate the economy and property market from global shocks… perhaps more important today than ever before.
2. Strong, diversified demand
Tourism in Panama continues to grow, with arrivals up 8.4% in the first half of 2025, according to Promtur Panamá. This growth is part of a long-term national strategy to expand tourism that involves airline partnerships, incentives for conventions, and more. A budget of $20 million per year has been dedicated to promoting Panama.
Importantly, Panama doesn’t rely on a single source of tourism. Visitors come from not only the U.S. and Canada but also from South America, Europe, and Asia. This diversity helps protect rental demand during regional downturns.
3. Genuine rental demand
Panama’s rental market is supported by more than short-term tourists. Demand also comes from business travelers, international firms, retirees, digital nomads, and long-stay visitors.
Because demand is broad-based and year-round, investors are less exposed to the extreme occupancy swings seen in markets dependent on one nationality or seasonal tourism.
4. Strong property rights for foreigners
Private property rights are guaranteed by Panama’s constitution and apply equally to locals and foreigners. Foreign buyers can own residential and commercial property outright, in their own name or through a company.
The buying process is straightforward for titled property, with clear legal protections. While some restrictions apply near borders and along the coastline, these are well-defined.
Working with a qualified Panamanian real estate attorney mitigates most risk.
5. Financing is available to non-residents
Unlike many overseas markets, Panama offers mortgage financing to foreign buyers.
Loan terms typically run up to 25 years, with interest rates around 6%, depending on the bank and borrower profile. Non-residents generally need a down payment of about 30%. While documentation requirements are thorough, banks focus primarily on ability to pay rather than credit scores.
Panama is one of the more flexible Latin American markets for expat lending.
6. No currency risk for dollar investors
Panama’s currency is fixed to the U.S. dollar, which eliminates currency risk for American and other dollar-based investors. Rents, mortgages, and resale prices are all dollar-denominated, protecting returns from exchange-rate volatility that can erase profits in other emerging markets.
7. Infrastructure that supports long-term value
Panama’s infrastructure—roads, health care, public transit, ports, and logistics—is unmatched in Central America. The Panama Canal cements its global relevance, while investments like the Panama Metro improve livability and urban demand.
Strong infrastructure makes Panama not just easier to live in but also safe to invest in long-term.
8. Favorable tax treatment
Property taxes in Panama are low by international standards, with generous exemptions and top rates below 1%. Transfer taxes and capital gains taxes are also modest compared to Europe or North America.
These low carrying costs improve net returns and make long-term holding more attractive.
9. Strong banking and easy capital movement
Panama is the region’s leading banking center, with no capital controls and a well-regulated financial system. Funds can move freely in and out of the country, which is essential for any serious investor.
While compliance standards have tightened, Panama remains one of the most reliable jurisdictions in Latin America for property-related banking and capital mobility.
10. Still undervalued relative to fundamentals
Property prices in Panama have risen over the past two decades, especially in Panama City. Even so, when compared to cities with similar infrastructure, global connectivity, and political stability, Panama remains undervalued.
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11. Liquidity on exit
With the right property in the right location, resale demand is strong. Well-located city apartments, established beach developments, and properties in proven expat markets tend to sell efficiently and at fair market value.
Liquidity reduces downside risk and distinguishes Panama from many overseas markets where foreign investors struggle to exit.
12. Political and economic stability
Panama is one of Latin America’s biggest political and economic success stories. Economic growth has been consistent, supporting confidence in property investment long-term.
13. Optional residency pathways
For investors who want it, Panama offers residency programs linked to real estate investment. Minimum thresholds start at $200,000 to $300,000, with relatively fast processing and minimal physical presence requirements.
Residency is optional, allowing investors to buy based on fundamentals rather than immigration pressure.
To smooth travels and successful property buys,
Sophia Titley
Editor, Overseas Property Alert