Panama continues to stand out as one of the most important real estate markets for international investors. But success in Panama is no longer a case of “buy anything and win.” The market has changed, and investors must also.
Live And Invest Overseas founders Kathleen Peddicord and Lief Simon have been investing in Panama for nearly 30 years. They were among the first to herald its potential, long before it was on the radar of the average investor.
They did more than just talk about opportunity in Panama—they acted on it. They invested deeply across sectors: pre-construction condos, raw land, commercial spaces, long-term rentals, and more. Few people have observed and participated in the transformation of this market so intimately.
Today, their message is this: Panama remains one of the strongest places in the world to buy property overseas. But success here requires more strategic thinking, better data, and sharper execution than in years past…
Why We Remain Bullish On Panama In 2025
Despite a shifting global economy, Panama continues to offer one of the strongest investment cases in the world. Here’s why:
- Strategic location: As the isthmus connecting North and South America, Panama enjoys a unique geopolitical position. It’s home to the Panama Canal, the expanded Tocumen International Airport (the “Hub of the Americas”), and a booming financial sector.
- Strong economic fundamentals: According to the IMF, Panama is “converging to U.S. living standards faster than any other country in the region.”
- Safe-haven resilience: In a world of political instability and market volatility, Panama has proven itself a steady performer with low inflation. The local currency is the U.S. dollar, meaning no currency risk for U.S. investors.
- Solid infrastructure: From the Canal expansion to the new Panama Metro system and cruise ports, Panama’s mega-projects continue to support long-term growth.
- Headquarters of business. More than 188 of the world’s largest multi-national corporations, including Caterpillar, Pfizer, L’Oreal, and more, have made Panama City their regional base.
- Growing middle class: From 2008 to 2023, Panama’s middle class grew from 45.7% to 59.9%. This means more internal demand for quality housing, both to buy and rent.
- Favorable expat climate: Panama offers investor-friendly residency options, excellent health care, and a tax regime that is territorial and welcoming to foreign capital.
- Tourism and rental growth: With 2.7 million visitors in 2024 (a 10.1% year-over-year increase), Panama’s rental market is thriving—especially in key urban and lifestyle hubs.
Opportunity Exists—But Finding It Requires Discernment
Once upon a time, you could buy almost anything in Panama City and expect to make money…
While it remains a compelling market, it’s more complex in 2025, and returns depend on clear objectives and local knowledge.
The factors that drive demand have evolved. While North American retires still represent a significant portion of the market, Panama is increasingly attracting digital nomads, young expats, and regional investors from Colombia and Venezuela.
These groups prefer to rent before they buy. Meanwhile, locals who lost access to credit during the pandemic have added to the renter pool. These trends are driving up demand for long-term rentals in well-located neighborhoods.
Rental prices are rising accordingly. In areas like El Cangrejo and Costa del Este—both popular with expats and younger demographics especially—rents are up more than 12% this year.
Investors focused on cash flow are benefiting, especially those who bought smartly priced resale or preconstruction units in licensed short-term rental buildings.
But not all investment strategies are viable. For instance, many investors are drawn to the Airbnb model, only to find out that short-term rentals under 45 days are illegal in Panama City (unless the building holds a rare hotel-style license).
Pricing can be problematic… Because of rising material and labor costs, preconstruction projects often command higher prices than comparable resale ones.
Resale may offer more space and immediate rental potential… but buying resale usually requires a lump-sum payment. Buying preconstruction allows you to space payments out and defer the purchase to a future date.
Understanding the nuances of each neighborhood in Panama City is also critical. Average prices per square meter vary widely, with Punta Pacifica and Casco Viejo topping $4,300, while El Cangrejo averages close to $2,800.
Liquidity varies as well; some areas are oversupplied, and buyers should be cautious about entering saturated markets.
Preconstruction strategies work best for investors who are long-term minded and value the payment flexibility. Value-focused buyers are finding success in the resale market—especially among distressed assets and bank foreclosures.
Where Smart Investors Are Finding Value In 2025
Successful investors in Panama are targeting high-demand, yield-generating rentals. They’re also capitalizing on resale opportunities where units are trading below replacement cost.
We’re seeing strong interest in turn-key short-term rental units located in licensed buildings in Costa del Este, for example. These investments offer high yields with legal certainty, professional management, and built-in demand from tourists and business travelers.
Bank foreclosures remain one of the best-kept secrets in this market. Privately circulated and often deeply discounted, these properties can deliver 20% to 30% savings on market value—if you know where to look.
Lifestyle investors are drawn to emerging beach destinations and cool mountain towns like Boquete, where tourism and remote work trends are generating strong rental demand.
In all cases, clear goals, well-researched plans, and on-the-ground expertise are crucial.
Navigating Panama In 2025 And Beyond
Panama continues to be a land of opportunity… but the market is not for uninformed buyers or speculative flippers.
For those who understand how to assess local regulations, builder reputations, and neighborhood dynamics, the opportunities are significant.
What’s working today is a focus on cash flow, legal compliance, and value-based buying. Whether you’re looking for a second home, a lifestyle asset, or a pure investment property, Panama deserves a place in your portfolio.
To smooth travels and successful property buys,
Sophia Titley
Editor, Overseas Property Alert