Emerging Markets New Real Estate Hot Spot - Panama

By Bob Bauman
January 29, 2008

The Sovereign Society's investment experts consistently have explained the greater profits available in offshore markets, especially so-called "emerging markets." While this expert advice usually concerns the best picks of stocks, bonds, or mutual funds, Finance Daily, published in the United Kingdom, suggests it's time to consider emerging market real estate.

Finance Daily notes: "Over the last decade house prices have boomed in almost every developed market with the exception of Germany and Japan. However, with developed economy markets at their current high, investors are increasingly turning their attention away from the traditional markets like Spain and to the emerging markets, such Eastern Europe and, new for 2008, even farther flung destinations such as Brazil, Egypt and canoeists favorite Panama!"

(That last reference is to a British couple, canoeing enthusiasts, now under arrest in the U.K. for alleged insurance fraud. The husband, supposedly deceased, hid out in Panama, where his wife joined him with his life insurance proceeds -- and both got caught).

The London publication list these as "fast facts on the next hot destination" in recommending Panama as a good investment bet:
1) Already popular with retirees
2) A good year-round climate and long coastline
3) 20-year exemption from Panamanian property tax for residential properties
4) Growing tourist industry
5) Major construction already underway
6) Cheap living costs

If you've been reading my blog or The A-Letter, you know the Republic of Panama is one of our favorites.

A stand out among current offshore financial centers, Panama combines maximum financial privacy, a history of judicial enforcement of asset protection friendly laws, strong anti-money laundering laws, and tax exemptions for foreigners. In many ways, Panama is ideally suited for the offshore investor who wants to enjoy the increasingly rare privileges of strong, legally guaranteed financial privacy and no taxes on offshore income, either corporate or personal.

Home and commercial construction in this country of 3.2 million people is still strong, but a bit cooler than last year. The capital's skyline continues to be a forest of dramatic skyscrapers and scores of construction cranes. Building permits jumped 91% last year, but new projects have slowed recently. There has been some talk about the so-called "real estate bubble" having begun to deflate. But Panama City is only half the population and in many more rural areas, such as mountainous Boquete in Chiriquí province, there are bargains still to be had.

I agree with Finance Daily: My advice on Panama real estate still is - come on down!