PANAMA ECONOMY INSIGHT MONITOR

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Sunday, June 27, 2010

Panama real estate outlook – June, 2010

House sales fell by 40% in 2009. Panama real estate has been strong impacted by the U.S. real estate collapse. Real estate sales are fallen since Lehman Brothers bankruptcy and the collapse of the U.S. house prices. The U.S. Baby boomers (the main buyers of houses and condominiums in Panama) cannot sell your house and moved to second home in Panama. The supply/sales ratio is increasing since Lehman Brothers bankruptcy. Despite oversupply of house and condominiums, prices is not ease. Despite house sales fell strongly in 2009, prices increased 1%. House supply fell by only 5%.

Real estate value added (production for the market) contracted 4.7% en 2009, as a result of contraction house sales to foreign purchasers.

PANAMA’S REAL ESTATE INDICATORS IN 2009
(% change year on year)
Real estate value added........................................ -4.7

House sales……………..................................... -40.0

House supply…..………...................................... -5.0

House prices…….………..................................... 1.0

New mortgage loans….....……............................ -9.8

From January to April of 2010, house sales contracted strongly by 50% year on year. House supply fell by 10% y/y. Despite this contraction of house sales and supply, prices decreased by only 5% year on year. Contradictory, the Instituto Nacional de Estadistica y Censo (INEC) published in its web site that real estate value added increased by 5.9% due to increases of house rents.

PANAMA’S REAL ESTATE INDICATORS IN 2010
(% change year on year)
Real estate value added (first quarter)..............  5.9

House sales (January-April)..........................  -50.0

House supply (January-April)........................ -10.0

House prices (January-April).......................... -5.0

New mortgage loans (January-April).............. 11.6

Panama Economy Insight forecast that house sales will decrease 25% and 3% in 2010 and 2011 respectively. After 2011, house sales will grow strongly.

PANAMA’S HOUSE SALES FORCAST
(% change, y/y)

Year 2009………………………………………..………………. -40%

Year 2010………………………………………………………..  -25%

Year 2011………………………………………………………..    -3%

Year 2012………………………………………………………..   11%

Year 2013………………………………………………………..   24%

Year 2014………………………………………………………… 42%

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