Ah, San Felipe…. Probably the most picturesque views in Panama City. Several years ago, this colonial old-town barrio was a slum, and no sensible individual would be caught dead there after dark.

Then a group of savvy investors pumped capital, initiative, and vision into the neighborhood, and over time, it has become an absolute gem. San Felipe, also known as Casco Viejo, overlooks the bay and the searing downtown skyline of Panama City. What were formerly condemned structures about to collapse are now loft apartments and streetside cafes.  The whole neighborhood has come alive with street music, concert halls, restaurants, and tranquil parks. Home to the Presidential palace, many of Panama’s elite choose to make their homes in San Felipe. While the neighborhood still has a few years left to improve, it is an absolutely gorgeous place…. and the developers know it. While Punta Paitilla real estate sells for $700 - $1,000 per square meter, San Felipe is selling for around $2,000 per square meter. For example, a small (1,000 square foot) 2-bedroom/1-bath apartment with ocean/city views was selling for well-over $200,000. Many small properties are fetching in the 300s and 400s. For someone seeking haven from a high cost of living in the United States, $300,000 is prohibitive..

It was a choice between modern and rustic, between contemporary and classic.  San Felipe is certainly more quaint, historic, and picturesque, but for my money, I felt more comfortable with a more spacious, cutting edge high-rise. I chose Pacifica. (*note- Rosie recently told me that they only have four units left in Pacifica, but other high-rises are in the works).

Real estate is booming in Panama.  Rich Latin Americans as well as baby boomers from the States are buying up condos in Panama City. Like all cities, Panama is running out of land to develop within the city limits. Moreover, the Panamanian government passed a favorable tax law that exempts owners from paying property taxes for 20-years if they purchase a development constructed in 2005. Consequently, every major developer in the city is trying to squeeze a condo project anywhere they can find space.

Panama City is a growing town; it has been about a year and a half since I’ve been. The new casino business is booming; the banking sector is as strong as ever; the Canal is, as it always has been, a tremendous revenue source; tourism is on the way up; foreign capital is flowing into the country. I saw far more Americans on this trip than the last; one couple from Florida seemed to be mirroring my visits. Panama is entering the mainstream.  As baby boomers retire and seek to extend the purchasing power of their dollar, Panama will inevitably be high on the list. There is no currency fluctuation (Panama is on the dollar); the weather is as warm as the people; you can fly anywhere in the world (direct flights to several cities in the US, Latin America, and Europe); the shopping is as extensive as most major western cities; and the cost of living is very low. 

Taking a survey at various stores around town, I compiled this sample of consumer good costs:

Sales Tax: 5%
Gallon of milk: $1.50
Pound of Bananas: $0.13
Brand new high-end Toyota SUV: $16,000
Items on Wendy’s 99¢ value menu: 75¢
Bottle Italian Red Wine: $6
Bottle of Chilean Red Wine: $4
4-course lunch for two with wine: $20
Men’s designer suit purchased in the mall: $90
4-course dinner for two with wine at a trendy restaurant: $40
Pound of top sirloin steak: $3
Burger King Whopper: $1.35
Pre-sliced fruit salad in grocery store: $1
Dry cleaning, men’s shirt: $0.50
Comprehensive medical insurance for family (monthly): $100
1 night at a Panamanian 4-star hotel: $45
1 night at a Western style 4-star hotel: $85
Tube of toothpaste in a pharmacy: $1
Movie theater tickets: $2

I determined that, with an income of $2000 monthly, one could live exceptionally well in this beautiful, modern city (remember - the average Panamanian makes significantly less than $10,000 annually).

The word is out, and people are responding; as more foreigners move down to this tropical paradise buying up the residential condos, demand for commercial development will increase; there are some tremendous opportunities for commercial/business development, and the tax laws are quite advantageous.