Much has been written on the comparison of Panama to our neighbors to the north Costa Rica. However, that is like comparing apples to oranges our similarities are few our differences are many. We need to go halfway around the world in order to find a similar country that comes close to the growth that we are experiencing.
Panama
Panama is busy re-inventing itself as Latin America’s regional logistics and services hub. The real estate frenzy in Panama continues. More condominiums are being built and planned, and major developments are underway. GDP is remaining high with four solid years of growth. Government has continued to pay down debt resulting in S&P recently raised Panama’s rating. Property prices are rising. Land is being sold from $700 to $1,000 per sq. m., rental yields are spectacular in Panama at 9.55%, taxes are moderate, total transaction costs are low, tenancy laws are pro-landlord, economic growth expected through long term projects makes Panama a very stable, sustainable environment. To read more on Panama’s explosive growth an excellent article appears on the Global Property guide.
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Dubai
The scale of what is being attempted defies imagination. The Jumeirah Palm will be the world’s largest artificial island complex. Dubai Waterfront, a giant crescent arching around The Palm, will be larger than Manhattan, with housing for 700,000 people, 12 kilometers of beach, and 200 hotels.
On March 2006 came the long-awaited law legalizing foreign ownership in designated areas of Dubai. The law gives foreign owners a freehold title, registered with the Dubai Lands department. It also allows them to sell or lease the properties without restriction.
The result of all this is that Dubai is on the verge of being oversupplied with new residential projects, especially apartments. Rental yields remain good, rental income tax rates are low, transaction rates are low, rent law handicaps landlords. To read more go the article on the Global Property Guide.
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Dubai’s future relies on oil, Panama’s future relies on the canal. The oil is going away it is not an everlasting fountain of money soon the tap will close. Shipping through the canal is in demand with the price of oil skyrocketing taking your vessel through the canal is not an option it is now a necessity. Given the Middle East propensity for secular violence safety becomes an issue.
When researching for this post it became very clear that in all the world no other location has what Panama has and what Panama offers to the world. Boom or bust not likely anytime to soon.
