Crises & Panama Real Estate MarketThe alarms still haven't been set off and the growth figures still haven't reached negative territory. But the international financial crisis is a priority in the minds of investors and businesspeople in all sectors of the country and especially in the area of construction.
That's how Pedro Detresno, of Pedro's Bienes Raíces, explains it. He says, "In Panama, there is not an alarming drop similar to that in the United States." To avoid that, he adds, the banks have placed restrictions or they have stopped financing for the purchase of apartments of four to five thousand dollars per square meter. The loans are written for values of 400 dollars a meter and below.
"I think it's good luck that our financial system has taken precautions and has acted with restraint. We aren't Costa Rica, where growth in construction is at zero," says the businessman.
Destresno explains that there is an adaptation to the evolution of the market and indicated that it is temporary.
"The number of buyers coming from abroad has been reduced and at the national level, the number of potential buyers has decreased when you discount 300,000 government employees whose stability will depend on the change of government," he says.
If the case of this promoter, the plan for 2009 is to maintain projects of buildings in the city and in Western Panama, where five or six neighborhoods are being constructed, both in La Chorrera and in Arraiján.
"We're focused on price per unit and in values of around 50,000 dollars, although we have houses and apartments for 100,000 dollars also," says Detresno.
The goal is to attend to the necessity of housing for professionals that need to be near their jobs.
Official figures report a housing deficit for families with incomes of 600 dollars or more, equal to 25.9% of the total, or 41,600 families.
The rhythm of construction continues to increase, at least in Panama City, according to the permits approved by the Director of Municipal Works in the first two months of the year.
This year permits valued at 273.1 million dollars were approved, an increase of 42% compared to 2008.
To reduce the international effect, groups like the Association of Real Estate Brokers (Acobir) and the Panamanian Chamber of Construction (Capac) are calling on industry actors to focus on projects of lesser value.
"Like Acobir, we as a chamber are recommending searching out markets that aren't necessarilyclients from the United States that were viewed as the only opportunity for a sale", signals Jaime Jované, President of Capac.
"We can open ourselves to the Canadian and European markets, businesses that want residences for their businesspeople and personnel. For executives that are looking to participate in the widening of the canal and that are going to have a long stay in the country. It's about looking for new opportunities," indicates Jované.
Please Visit the Panama Real Estate Listings in Encuentra24.com
SYMBOLS
Some private megaprojects focused on attending to the foreign market advance at different rhythms.
On the one hand, the Los Faros complex has been paralyzed for several months, after completing the fillings and foundations. Its promoters insist that after adjustments in their financing plan and choice of a contractor, the work will resume.
At the same time, in the Trump Ocean Club, there are advances. Jénaro Echeverri, the overseeing engineer, says that there are approximately 1,200 workers on site and this number will increase weekly.
"Currently we are on the 21st floor and we are advancing by one floor per week. We have
Foreign promoters focused on the promotion of luxury apartments have reduced their activities. Proof of that is that they won't attend the next Expo Vivienda Verano 2009, which will take place from the 2nd to the 5th of April, confirms Enrique Asencio, president of the organizing commitee for Capac and representive of the promoter Sucasa.
The event will have a reduction of 6% in participation of promoters who haven't secured financing for their projects.
At the same time, the fair will have the participation of 200 projects and expects to obtain sales around 160 million dollars, the same as last year.
Expos like this one attract buyers not just to see the variety of options, but also to take advantage of promotions.
"In times of crisis, there are companies that offer vehicles for the purchase of a house. This is not the current case, although discounts and the elimination of closing costs have been considered," he says.
In the case of Sucasa, Asencio explains that they maintain its plan of offering 1,200 housing units in 14 projects with principally Panamanian buyers. It's similar to an offer than this company makes every year.
As for value, the prices are between 20,000 and 150,000 dollars and the projects will be constructed in Las Cumbres and Pacora.
Asencio stresses that the sales dynamic has been maintained. Projects that are being finished are being turned over as either primary residences or for rentals.
In 2008, Sucasa registered more sales with respect to the previous year. And in 2009, there hasn't been a noticeable decrease, but neither has there been an increase in the rate of growth.
"It is maintained that banks will be more flexible with their conditions, since they have liquidity," hopes the executive.
The possibility of holding another real estate fair in the middle of the year is being studied because with the change of government, "the public sector is frozen".
Marina González, of Marina's Realty, recognizes that there is a slowness on the part of investors that are looking for special prices. Potential clients are waiting for a lowering of prices for properties that cost 1,600 dollars per square meter. They also want projects that are already finished or are about to be turned over.
In spite of the crisis, in Panama there are still sales, but not at the same level as two years ago. Besides, banks are still lending although with more requirements; and prices aren't still going up, sales should be maintained," she opines.
Engineer Mitsila Espino, executive Director of the National Housing Council (Convivienda), indicates that prices haven't shown a signifcat decrease because, at the same time, the costs of construction materials haven't gone down in a considerable manner so as to provoke an adjustment.
It's the fact that the real estate cycle is arriving at its end, stresses Mauricio de la Guardia, President of the Panamanian Association of Insurers (Apadea).
This sector has seen so far in 2009 that growth in financing and industry policies has been smaller with respect to last year.
At the close of last year, industry growth was at 26% and, in contrast, in the first months of 2009 it was growing at 10%.
De la Guardia has seen that the contractors that he maintains as clients don't have new applications, so that when building projects finish between this and next year, there will be a change in the composition of growth.
"We are seeing that our clients aren't calling for bids. We don't see the beginning of new projects, but the projects that were initiated in the past are being maintained at a good rhythm," he explains.
The widening of the canal will be vital in livening up construction and all related activities.
"There won't be big desposits dedicated to infrastructure, but life insurance policies will be maintained at high levels due to the vast quantity of employment. We believe that workers aren't going to enter into new projects but many will be connected to the widening in the second semester of the year," indicated de la Guardia.
PROPOSALS
Osvaldo Marchena, President of Acobir, states that the opportunity for Panama is to promote itself as a global business center, as was approved by the Law No. 41 of 2007. It's about attracting the establishment of regional headquarters of multinational companies. In this sense, Marchena proposes that, "all of the actors of economic activity go out to global markets to promote the good points of the country. The real estate sector will be benefitted directly by the establishment in the country of regional headquarters."
The director bets that a new market would need space in commercial spaces, offices, residences, and every type of product and service.
Acobir is structuring the reception of non refundable funds to finance 70% of this international campaign.
To achieve this objective, the director recognizes, it will require that the state offers better infrastructure, security, transportation and similar matters.
Convivienda, which groups together companies responsible for approximately 70% of the housing that is being constructed in the country, hopes to this year to create 5,115 new residences with a value of 470.5
million dollars.
This will signify an increase of 6% in comparison to the amount constructed in 2008.
Eduardo Ameglioi, president of the group, signals that although Panama will face the crisis in financial markets better than other countries, it doesn't justify a passive attitude.
Preventative measures are required to minimize the consequences of the global recession.
Part of the investment of the budget should be focused on the construction of schooles, hospitals and above all residences with social interest, helping to diminish the habitational deficit that, according to numbers of the Housing Ministry (Mivi) reaches 160,552 residential units.
"We propose a coalition between Mivi and private enterprise, in which complete drafts are developed for new communities on state lands, in which Mivi would be responsible to supply basic infrastructure, on which the promoters could develop an important number of residences for social interests," he indicates.
"A schema needs to be established, as was used a few years ago, by which using a fund called 'Profinco', the state guaranteed the payment of a part of the interests on mortgage loans, or the alternative of revising the Special Fund for Interest Compensation that could be used for the financing of social housing."
The lack of infrastructure and of services to supply the needs generated by projects of the real estate bubble is a new opportunity for a public-private alliance.
|
Panama's Real Estate Market 
