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Investing in real estate in Panama can be a smart decision. The price of properties in Costa del Este, for example, one of the most upscale real estate development areas withing Panama City, has increased an average of 42% in the past five years, mostly due to rallying foreign investment and significant infrastructure developments. The square meter there has risen from an average sales price of $2,104 in 2021 to $3,000 in 2025.
Generally speaking, property prices in Panama City and the rest of the country have increased over the past five years after the surge of infrastructure improvements, foreign investment and an ever-increasing expansion in multinational companies. Despite some slower growth given market dynamics in certain areas compared to the rest, the overall boost in value is notable and indicative of a healthy real estate market.
Strong Reasons to Invest
The economic stability that Panama enjoys is a key factor to its real estate success. Panama has a dollarized economy with steady GDP growth, making it less prone to currency risks. Furthermore, the country has a democratic government and favorable legal protections for foreign investors; it boasts a strategic location: its position as a logistics hub due to the Panama Canal boosts demand for commercial and residential properties.
It is worth noticing that tax exemptions on new constructions and competitive property taxes encourage investment, and that a growing tourism and expat market has made Panama popular among retirees and digital nomads, driving demand for rental properties, particularly in areas like Panama City, Boquete and Bocas del Toro.
Projects like the metro expansion in Panama City and improvements to airports bolster real estate values as well.
Popular Investment Areas
Panama City remains the best option for high-return rental properties, luxury condos and commercial real estate.
Beachfront properties like Coronado, Pedasí and San Carlos are booming for vacation homes and Airbnb rentals.
Mountain regions such as Boquete and Volcán offer attractive properties for retirees and those seeking cooler climates.
Among the islands, Bocas del Toro and San Blas appeal to eco-tourism and boutique developments.
Investment Opportunities
Long-Term rentals offer consistent demand from professionals, expats and retirees.
Short-Term rentals such as Airbnb offer strong tourism growth and makes vacation rentals profitable.
Land investments are also a great idea: buying land in emerging areas can yield significant appreciation.
As for commercial real estate: warehouse and retail spaces near logistics hubs have strong potential.
Elite Panama Estates strongly advises new investors to work with reputable real estate agents familiar with local laws such as themselves; conduct thorough due diligence on property titles and legal status; and prioritize properties in emerging areas or with tax exemptions.