In Panama, the real estate market is surrounded by myths that can lead to costly mistakes. To make a sound decision, it’s essential to separate fact from fiction—especially since complaints against real estate agencies are a reality backed by official data.
Here are some of the most common myths and what you really need to know:
Myth 1: “The Panamanian market is a bubble about to burst.”
Reality: It’s not a generalized bubble, though there is oversupply in certain segments.
- Solid fundamentals: Market growth is backed by real demand from multinationals, expats, and the local middle class—not just speculation.
- Localized oversupply: The problem isn’t the entire market but specific segments—like mid-to-high-end apartments in certain parts of Panama City and some beach areas. This means some properties may take longer to sell or rent.
Myth 2: “All real estate agencies are the same”
Reality: Not all operate with the same level of transparency and ethics.
- Official numbers tell a story: Panama’s consumer protection authority (Acodeco) received 3,348 complaints against real estate agencies between 2020 and 2026, for over B/.205 million. The main issues include abusive clauses (885 complaints), failure to return deposits, and hidden defects.
- Choose your advisor wisely: Some agencies act as ethical consultants, thoroughly vetting projects before offering them. The U.S. Embassy’s recommendation is to hire a licensed attorney and a real estate broker with verifiable references.
Myth 3: “Buying pre-construction is always a great deal.”
Reality: Buying off-plan can be profitable, but it carries significant risks if you don’t research the developer.
- Risk of unreliable developers: Bad experiences often come from “ghost developers” who fail to meet deadlines or deliver promised quality.
- Due diligence is key: Before handing over your money, investigate the developer’s track record, financial health, and regulatory compliance.
Myth 4: “Any foreigner can buy without any worries”
Reality: While Panama doesn’t restrict foreigners from buying property, there are unique legal aspects you must understand.
- No restrictions, but nuances: A foreigner can buy under the same conditions as a Panamanian, but understanding the system is critical.
- The big issue: untitled land: Approximately 90% of land outside Panama City is untitled. Buying a property with Rights of Possession (ROP) is very risky for a foreign investor. It doesn’t offer the same legal protections, is hard to resell, and banks won’t accept it as collateral.
- Unexpected costs: You may face special maintenance assessments if the building hasn’t saved for major repairs.
Myth 5: “Panama is just Panama City”
Reality: The interior and beach areas are experiencing significant growth.
- New opportunities: Thanks to remote work, areas like Playa Venao and the islands are seeing unprecedented growth, offering chances to diversify beyond the capital.
Tips for successful investing
- Realistic returns: Gross rental yield in Panama City is roughly 6.9% to 7.6% per year, but net yield (after expenses) is typically 4% to 5%. Don’t be swayed by promises of much higher returns without verification.
- Liquidity is low: Selling a property in Panama can take months. This isn’t a market for short-term flips but for medium-to-long-term investment.
- Verify everything: Before signing, read the contract carefully (especially clauses on refunds and penalties), inspect the property, and make sure all verbal offers are put in writing.