Even during the recent "global
recession" Panama
continued a relatively strong construction pace
albeit at a much slower pace than normal. Prices did not crash as in many other global markets but some Panama City condos declined by 10-20% and/or put on hold.
Several major condo projects in Panama City
were cancelled as nervous investors withdrew.
In Coronado and other interior locations, prices remained rather solid and, if anything, continued to increase during the global recession
although demand clearly weakened. While there were fewer buyers, but prices
were rarely
slashed. Probably less than 5% of property owners have a mortgage in Coronado and property taxes remain
low or zero.
In Coronado, more than
250 new businesses will be opening their doors in 5 new shopping
complexes by late 2011 at rents almost equal to those in Panama
City ($15-23/square meter per month).
An example of a real estate opportunity
in the "greater Coronado"
area is as follows:
In Coronado several major
luxury
condominium projects are in nearing completion. In most cases, each tower has
75 to 200 condo units of approximately 1000 to 4000 square feet. Some penthouse units are 8000 SF. New projects
are still being announced and property sales
continue although new house construction has slowed.
A landmark Coronado luxury project
called "El Alcazar" with 64 units recently
received its occupancy permits.
There are still a few units left ranging in size from 3000 to 8000 square feet.
Next door in
Gorgona there are at least 10 significant condo developments in various stages of
development. Some of them have "sold out" their first phase Many of them are awaiting a return of the global housing and stock markets.
In the mountains of Altos del Maria,
30 minutes from
Coronado, about 75% of the 2000 available lots on 5000 acres have been purchased
primarily by
expats since 2005.
Significant new luxury hotels are
being developed and opening on both Panamanian coasts with the Red Frog and Playa
Blanca some of the latest additions. The 5 star "Breezes" opened its doors in
October 2009 and has been full ever since with charter flights from Canada. About 200 new hotel rooms are scheduled for Coronado in the next 12 months.
Panama continues to benefit from
Baby Boomers looking to
secure a second or permanent retirement residence before the great rush begins ... which has probably been postponed because of the global crash.
Another theory is that things have become so bad in the USA that many people will see Panama as their only sensible option with retirement costs one third of their USA budget.
Panama remains a magnet for
builders and developers
particularly from the USA looking for greener pastures to develop but the market requires considerable study.
With baby boomers crossing the
"finish line" in record numbers, it would seem that there is no shortage of new
retirement housing demand on the horizon.
In the Coronado area, construction activity has focused on new commercial properties but the residential markets are also very active For example, Alcazar Park has sold
approximately 100 lots averaging 900 square meters at about $125 per square meter with 60%
going to expats all in the last 2 years during the "Great Recession". Construction is just
getting underway.
Building Your “High End” Home
Construction Details
- Your site is leveled and graded for optimal drainage.
- All exterior walls are constructed using 6” cement block (on seismic footings) for better cooling/ sound insulation, pipe concealment, corner details, overall strength, and security window bars.
- Septic tank of 2x2x2 meters is constructed according to municipal standards.
- All roofs use fired colonial clay tile on a zinc sheeting underlay on a welded steel roof structure.
- All exterior entrance doors and frames are constructed with steel and have deadbolt locks
- All cement interior walls are smooth-finished using a gypsum pasta coating resulting in a wall surface similar to that of a standard drywall finish in North America.
- All floors are ceramic on a “topping” layer with a 4 inch edging at the wall. The ceramic allowance is sufficient to include some basic porcelain ceramic products but not all.
- All shower areas have a standard 2 meter high (80 inches) ceramic wall. Bathtubs are an extra.
- Level drywall ceilings are constructed at a standard 9 foot 3 inch height. Cathedral ceilings are an extra but provide more cooling volume.
- Terrace, exterior “overhang” areas, and bathroom areas use moisture resistant “green” gypsum.
- Exterior overhangs and terraces are well vented to prevent heat build-up in attic areas.
- Kitchen counters are constructed using “Granito” which looks and feels like real granite but is man-made and requires a sealer from time to time. Real granite is an extra less allowance.
- Solid wood kitchen cabinets (upper and lower) use “cedro margo” which is similar to teak.
- All plumbing and kitchen fixtures are American Standard or equivalent quality.
- All water, drainage pipes and venting use heavy gauge PVC or CPVC (for hot water).
- Vanity sinks with drawers and doors are installed if possible otherwise a “pedestal” is used.
- Standard color “Glidden” paint (“Pro”) is used after an initial “sealer” coat on all surfaces. Custom paint colors are an extra less the standard allowance.
- Internal and all terrace electrical wiring is copper strung through electric PVC tubing. Heavy gauge aluminum wiring is used from the main house electric panel to the street meter. Copper wire is an extra for this connection less the allowance.
- All electrical wiring for ceiling fans is pre-designed for use with wall control switches.
- The client is responsible for the purchase/installation of light fixtures, ceiling fans, AC units, bathroom mirrors and accessories, window shades, appliances, landscaping, and fencing.
- Your home is pre-wired for cable, telephone and internet connections and sound if desired.
- You have a choice of hot water systems including instant gas, instant electronic, and/or a hot water tank. Each has advantages and disadvantages. A solar hot water system is an extra.
- Windows are constructed using aluminum or PVC frames with tinted plate glass and screens
- Following house construction, the site is sodded as required in your landscaping plan and watered for 3-4 weeks to root properly.
Client Responsibilities and Design/Permit Costs
- The client is responsible to pay all required architectural/engineering plans as well as for the municipal building permit. Architectural fees are typically 5% of the estimated construction costs and the municipal building permit fee is typically 2% of this same amount.
- Pacific Coastal Solutions SA (PCS) is prepared to assist in this permit process and recommends that the client provide PCS with a “power of attorney” letter for this purpose.
- The client is responsible for financing construction in a timely manner.
- There are typically five payments required on a “construction progress basis”. The first payment is for 25% and the final payment is for 10% when an occupancy permit is obtained.
Builder Responsibilities and Construction Costs
- In Panama, the cost per square foot of a custom home is based on “drip line measure”. This area is the “footprint” of your home as seen from a helicopter. In other words, one square foot of covered terrace area is priced the same as one square foot of bedroom space.
- The fixed price to construct a “high end” home is approximately $750 per square meter
(there are 10.7 square feet in one square meter).
- All construction is in accordance with local municipal building standards and any additional quality standards as may be set out in a legal contract between the client and the builder (PCS).
- PCS handles all employee paperwork and payments to the Panamanian Social Security system.
- PCS provides a one year guarantee on all construction work.
