Panama has been evolving (for better or worse) over 2007 into a regional monster. The economy is booming, the real estate sector is still in full force, and the tourism industry appears to be just getting legs. But what does 2008 have in store for the little isthmus whose name means an abundance of fish? Here are my predictions for Panama tourism and real estate in 2008, however idealistic or cynical they may be.
- Casco Antiguo will persist as the only controlled real estate market in Panama City, founded on the principle of limited supply thanks to maintained preservation laws by the government. 2008 will see more renovation in Casco Viejo than any years past yet it will still maintain its old world feel; emerging eventually as the only true walking neighborhood in the nation's capital where you don't run the risk of getting punched by a red devil.
- Due to poor regulation, blinded foresight and a serious lack of artistic/historic appreciation in Panama City, a number of blocks in once-tasteful neighborhoods like Bella Vista and San Francisco will be knocked down in favor of new real estate projects. This slash and burn process will steer Panama City further in the direction it's been heading: tall, sterile-looking apartment buildings void of inhabitants.
- Too many high-end condo projects will exist on the market and not only will there not be enough people to buy them, but those wealthy investors who are capable of spending will snub said units (and developers) for over-promising and under-delivering. These wealthy investors will also be turned off by Panama City's downfalls and either look elsewhere in the interior to invest or simply go home, discrediting it all as one big hoax.
- Throughout the interior, a handful of towns will experience off-the-charts growth thanks to catalytic projects by private groups, government agencies, and expected tourist preferences. Big name developers will start to focus on the interior because they're simply running out of space in the City. Among these interior towns, Penonome, Santa Fe, and Boca Chica, will be amazing ground-level investments for both residential and commercial real estate buyers. Other areas already-blossoming in the real estate sector, like Gorgona, will continue to grow at exponential rates and will yield tremendous ROI for investors due purely to a lack of supply in completed beach housing units.
- More tourists will enter Panama in 2008 than ever before. The City will become even more congested, traffic will reach suffocating levels, and true sophisticated travelers will begin to choose to bypass the capital in favor of small, more unique beach towns like Santa Clara, Pedasi, and Santa Catalina. New domestic and international airports will fuel this bypass and privately owned businesses catering to this new traffic in said rural regions will flourish. In the 12 months of 2008, government waste and transportation systems in the City will scramble to organize themselves before condos are completed.
- In 2008, living prices will rise faster than in years past, especially in Panama City where long-time residents will be forced to live in lower-cost suburbs. Fees that have stayed the same for years such as taxi rides, highway tolls, and a bottle of Coca Cola will increase, and slowly but surely lower-to-middle-class locals will migrate out of the City. Areas like San Miguelito will continue to be overpopulated and new suburban development towns like Chorerra will act as the catcher's mitts for said urban sprawl.
- The government will develop few if any new incentives, though desperately needed, for eco-friendly hotels, however the good news is that a bevy of entrepreneurs (many from neighboring Costa Rica) will take the reins and build small boutique resorts themselves enduring high expenditures.
- Due to a huge increase in foreigner foot traffic, petty crime will increase and City residents will start to see pick-pockets, muggings, and other small tourist-involved ordeals on a regular basis: something that Panama has rarely experienced in the past. Employees in companies will also begin to steal more and the pawn shop industry will grow significantly.
- Sex tourism will sky rocket in 2008. New locales will open up to prostitutes as older ones have now closed, and gringos in silk palm tree shirts will fill these new establishments with gusto. Former hotspots will soon realize their business models rely on hookers and thus re-open their doors to silicone boobs. Organization of prostitution will improve as well in 2008 and ID cards, entrance lists, and regular STD testing will bolster the industry.
- The financial crises in the US will mean significantly less American investors and travelers than projected by IPAT and everyone else. However Europeans (with their strong currency and weird half-shorts-half-pants-thingies) will fill in the void thanks to new direct flights from hubs like London, Paris, and Milan. This influx of European tourists will directly impact the restaurant and casino industries and naturally, other service related industries in Panama will improve (slowly but surely).
- 2008 will see the most failures in real estate projects to date, as many first-time developers will realize they've gotten in far over their heads. Labor strikes, increased material costs, competition in the marketplace, regional nuances, and the difficulty of bank loans will all put an abrupt end to optimism and even developers who sold a majority of their units will end up canceling their projects, returning money to investors, and slipping out quietly like rats from a sinking ship.
- Real estate agencies in Panama City will do especially well in 2008 thanks, not to fancy new condos, but an increased interest in old or previously owned apartments and homes as well as raw land sales. To avoid any preconstruction bubble burst, agencies specializing in these markets will thrive and agents themselves will have a record year seeing as though commission checks on such re-sales are instantaneous (as opposed to the prolonged/staggered commissions of preconstruction projects).
- Augmented tourism and real estate numbers in cahoots with the Canal expansion and various other industrial projects will sop up the last remaining labor force in the isthmus, leaving small, private developers to illegally import workers from elsewhere in Central America. 2008 will see an increase in deportation of Columbians, Guatemalans, and Nicaraguans.
- Water, specifically in the nation's interior will continue to become a pressing issue for locals seeing as though large developers have priority to resources. Similarly, electric power will see increased shortages in the City thanks to an abundance of new completed towers.
- Vacation rentals of condos in City and Pacific Beaches will increase tenfold. Due to a lack of hotels and an oversupply of luxury condominiums about to break onto the market, the luxury rental industry will blossom in 2008 (at least until new hotels under construction are complete).
If I made any mistakes or said anything horribly incorrect, I'll probably go in and edit the article without anyone knowing. I'm sure there are a bunch more and I'm sure the regulars of this site will have interesting things to say about those listed above. The negative points echo with the current state of our northern neighbor Costa Rica; crime, water issues, waste problems, and poor beachfront zoning. But the positives are also quite encouraging. What I don't think anyone can argue, is that 2008 will be a crucial year for Panama real estate and tourism.
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