Panama, A Haven for European Investors
(thepanamareport.com) First they came for Levis. Then they came for iPods. Now Europeans are in search of something new and cheap to bring back home and Panama real estate seems to fit the bill. With their options varied and buying power strong, why are Europeans setting their sights on Panama?
I was still in school when I tried to smuggle a cured leg of Iberico ham from Spain back into the United States. This type of ham was illegal in my country I knew, but the prospect of sharing the exotic meat with friends and family was quite simply overwhelming.
I was in the process of filling out my customs form when it asked me to declare anything I had purchased and planned to bring back into the country. I wrote the word "ham" so sloppily so that it began to resemble the word "hat" figuring that it my slip past a lazy set of eyes. Needless to say, the dirtied hoof sticking out of my backpack was immediately spotted by agents, confiscated and presumably consumed that evening behind closed doors.
Panama has seen over the past year, and will see in the near future a giant influx of European investors looking for the rare, the new, and the exotic and real estate in Panama is at the center of their crosshairs. The slumping US dollar is one major reason for this, seeing as though Panama uses the US dollar as its currency. Many Europeans are viewing this as a once-in-a-lifetime opportunity, a great big discount sale at Lord and Taylor, thus using their large Euro coins and non-descript colorful bills on shopping sprees in Panama where land and real estate prices still pale in comparison to home.
Another factor aiding this exodus is the competitive marketplace at home in both the business and personal sectors which propels Europeans to leave. Energy costs and manufacturing wages for example are far higher in Europe than in Panama, which is luring both small and large businesses to relocate. A failure in confidence of the US market has put Panama surprisingly in the forefront of many investors' eyes.
Manifestations of this mass departure can be seen in Panama City's real estate offices where sales to Europeans have skyrocketed, in malls where (come on now) the Capri pants are a dead giveaway, and in restaurants where they'll spend two hours trying to order a baguette with cheese. Tour busses packed with European tourists arrive at the City's landmarks like little war recreations and my personal favorite, bars and clubs are beginning to be invaded by gelled hair and effeminate clothes we've come to label as Euro-chic.
Increasing real estate prices in Panama that tend to be a turn off to people familiar with the market, don't seem to phase these Europeans: the rumored hedge against Panama City's housing bust. And while they are heavily fueling this country's real estate boom, Panama is not the only thriving market in which Europeans are investing.
Singapore, which has recently seen a shortage in housing that's led prices to rise dramatically (over 30% in one year) is one option as is Shanghai which has seen rapid urbanization, high demand and nearly a 30% price increase on real estate. Istanbul, where prices have jumped more than 10% since last year is beginning to attract European investors too, deemed by Price Waterhouse Coopers as the second-best property investment market around. And lastly Moscow, its real estate prices up 20% from 2007, has seen its fare share of Euro-mullets of late too.
Although this is a definite trend in Panama, predictions are starting to get ahead of themselves with some reputed airliners already reported to be cutting back direct flights from Europe due to lack of demand. It's a Panama today of extremes---of giant buildings, massive emigration, and grandiose forecasts---a visible whirlwind of activity. Europeans will bring great things beyond just their money: such as big sunglasses and racing sneakers and sexy accents.
It's nothing really new to Panama after all: the Spanish once came here for gold, the French once came for a canal, and the Italians once came...to make pizzas or something. But with such changes in the world economy, today's Europeans aiming for Panama appear to be more eager than ever.
