Panama City, the vibrant and cosmopolitan capital of Panama, has been gaining international attention as a top destination for both tourists and expatriates alike. Its strategic location, thriving economy, and stunning waterfront skyline make it an attractive place to live and invest. One of the most common real estate investments in Panama City is purchasing an apartment. In this article, we will delve into the various costs associated with purchasing an apartment in Panama City, Panama.
The cost of an apartment in Panama City can vary significantly depending on factors such as location, size, condition, and amenities.
- Luxury Apartments: In upscale neighborhoods like Punta Pacifica, Costa del Este, and Ave Balboa, luxury apartments with breathtaking ocean views and high-end amenities can range from $2,500to $5,000 per square meter. Prices may go even higher for penthouses and exclusive developments. Prices also vary according to number of bedrooms, and how much ocean view the unit has. Equally, buildings are starting to compete on amenities, with many newer buildings standing out for their spa and resort type of environments. Buildings that stand out: Nuovo/Armani just off of Ave Balboa with decadent common areas and furnishings from Armani. Another iconic building is PH Arts & YOO on Ave Balboa, with it’s modern contemporary design, extensive common areas, and a gym that rivals the luxury hotel offerings.
- Mid-Range Apartments: In more affordable areas or older buildings, you can find mid-range apartments ranging from $1,500 to $2,500 per square meter. These apartments may offer fewer amenities but are still well-located within the city. The are still close to parks, exercise areas and offer excellent value for money. Often older buildings offer more square meters, and more old-fashioned amenities. Still, if you like larger spaces and are willing to do more to make it your own, you can find units that are affordable and spacious.
Budget Apartments: For budget-conscious buyers, apartments in less central neighborhoods or older buildings can be found for as low as $1,000 per square meter. Keep in mind that these may require renovation or updating.
When purchasing property in Panama City, you’ll need to factor in various closing costs, which can include:
- Real Estate Agent Fees: Typically, the seller pays a 5% commission to the real estate agent, which is shared with the buyer’s agent.
- Legal Fees: You’ll need a lawyer to handle the legal aspects of the purchase. Legal fees can range from 1% to 2% of the property’s value. Panama does not have title companies who handle title insurance and title searches. A real estate lawyer handles this aspect for you. It’s important to have a good lawyer who knows the title process to ensure you end up with clear title and ownership.
- Title Insurance: While not mandatory, title insurance is recommended to protect your investment. Costs depend on the property’s value but can range from 0.05% to 0.1% of the purchase price.
- Transfer Tax: Panama imposes a 2% transfer tax on either the property’s cadastral value or the sale price, depending on which has the higher value. For new properties, this tax is often capped at $30,000.
- Registration Fees: Registration fees are approximately 0.5% to 1% of the property’s value.
Mortgages cannot be easily obtained by an expat. But it is possible depending on the bank when purchasing an apartment. In order to be considered for a mortgage, you must usually be a resident, have an existing bank account, and show proof of income. If you have these key factors you must still be prepared to put down 25-50% of the property price. Once you’ve crossed all the eligibility hurdles of obtaining a mortgage, you’ll need to consider mortgage costs. Interest rates range from 5% to 7.5% for USD-denominated mortgages.
Maintenance and HOA Fees
Maintenance fees are significantly less then like Apartments in major USA and Canadian Cities. But it’s important to understand the building management and know what you are fees are paying for. Panama City is a humid warm climate, and buildings require significant upkeep to remain fresh and current. Understandnig the management and how your fees will be spent is a critical part of purchasing in any building. HOA fees can vary widely depending on the building and its amenities but may range from $150 to $500 per month or more. The average fee is about $2.50 per square meter.
Conclusion on purchasing an apartment in Panama
Purchasing an apartment in Panama City, Panama, can be a rewarding investment, offering a high quality of life in a thriving urban environment. However, it’s crucial to thoroughly research the local real estate market, understand the costs involved, and work with reputable professionals throughout the buying process. Keep in mind that property prices and regulations may have evolved since my last update in September 2021, so it’s advisable to consult with a local real estate expert for the most up-to-date information before making your investment decisions.