¶ Real Estate and Retirement in Panama
Welcome to RealtyCast Global , where we bring insights and advice from top professionals in the global market . Join us for a journey of culture and real estate from countries across the globe . My guest today is Eric Van Hoorde , from Panama . Eric's been a good friend of mine for a long time and he is the past president for FIABSI Panama .
He owns his own company called Van Hoard Realty in Panama City and he's known as a global realtor , heavily involved with NAR and all the global aspects that NAR has to offer . Eric , thanks for being on our program today . I certainly appreciate you accepting the invitation .
Thank you , Hugh . It's a pleasure to be with you today .
I'm so happy you could be here . Let's just start right out of the chute . We've got a lot to talk about , and I'd like to focus today on the current real estate market in Panama . If you could give us a little bit of an update about what you're experiencing there , that would be great .
Sure , definitely . Let me tell you , actually , nowadays , panama is doing very good . We do have before and after COVID , as everyone , and then what we're doing right now is that . What we have to see is how was the market before COVID and how we're doing after COVID ? A lot of people say forget about COVID . That was a while ago , it's not that far away .
So we have to consider how was the country before the period and after the period ?
If you have a lot of inventory it takes some time just to consume the inventory and then in in our case , we we used to have a lot of inventory for commercial properties that now we're starting to feel that we're doing much better , you know , because we're we're actually consuming those , uh , those inventories .
So definitely we still talk a little bit about COVID because it's not like something that was like yesterday or too far away , but in general I feel that the country is very attractive . When we talk about the region , everybody knows that Panama is one of the top countries in the region and is very attractive for investors .
The government has a lot of incentive for international companies to move to Panama and they give incentives to the company themselves and then at the end , all these multinational companies that come to our country , they start helping and supporting the economy itself .
I see , and that makes sense completely .
I mean , it seems like everybody uses COVID as a measuring stick about before and after , but I feel like that just what I've seen in Panama I mean really selling a lot of properties there I feel like that baby boomers probably have a huge direction as far as moving there because of opportunities for economical living number one .
But more importantly , I think also that you have people moving there for vacation homes , for other type of investment properties and in short-term rentals .
Also , if you were looking at making , you know , just say you're in the United States and you're looking at making an investment in Panama where would you say would be like the two or three most popular places to invest in residential properties ?
Okay , when we talk about investing , we have to focus on what is the purpose of the investment ? Just to get a return on investment . It's a property that you might use eventually , or a few months per year . So that's the first question . Let's say that you're only looking for the return on investment .
I believe that it should be in the city of Panama and we do have a lot of demand for small units in the city , on the financial district , on the areas of Costa del Este , santa Maria neighborhoods . That is basically where most of the multinational companies are located .
Most of the multinational companies are located and all their personnel you know their staff they need to rent , they need to live there . Everything is walking distance . So definitely that would be like the most attractive for as a return point of view . But when we're talking about different , we do have a lot of alternative .
We have on the beach area , the mountain area , have a lot of alternatives . We have the beach area , the mountain area . There's a lot of expats or retirees that moved to Panama and they love to live in either the beach area or the mountain area . So I believe that it's like a mix . But when we talk about just the return investment .
I believe that the highest demand is on these two neighborhoods that are in the city itself .
I see During COVID we'll go back to that for just a minute people found out they could work remotely and not have to go into offices Across the United States . People learned that pretty quickly . Offices across the United States People learned that pretty quickly . So during that time did you see an increase in purchasing condos and homes in Panama at that time ?
Well , actually , at that time during COVID , people decide just to move to the interior and they prefer just to work from their beach house or the mountain house instead of living on a small apartment on the city , but at the same time , it was easier , uh .
Uh , it really depends on the structure that they have , the family , the family structure that they have , because , uh , we already talked about for for so many months and years about the effect of COVID , but when we talk about how this affects investors , I think that at the end it's a mix . We have a demand for everything .
We have a demand for people that are looking for more let's say , a bigger property , more , let's say , a bigger property . The property in the city has a price and the property in the interior is a lower cost . So I feel that it really depends . It really depends on what the investor is looking for .
So when you're looking at , just say , a baby boomer moving into Panama from either Canada or the United States and they're looking for not necessarily a huge return on their investment because they're not buying it to rent short term , they want to live there and they want to be living in an economically affordable area .
Affordable area what would be an average price for a smaller home that would fit , say ?
you know two individuals . Sure . Well , I think , when you think about an average price , would be something around $180,000 and $350,000 , more or less , because it really depends on the location . Sure . And well , finishes are very similar actually , so it's not like a main point . I feel that , based on location , it will be in that price range .
And let me tell you , there's a lot of people that are retiring from the States and from Canada , basically , and they love to move to Panama . Based on our weather , based on the cost of living , people can , if just to . I didn't know . You were gonna ask me later on , probably something about the visas and all this stuff .
One of the requirement is to have an income as a pensioner , as a retiree , of $1,000 . So once you can prove that it's because that's more or less what you really need as a person just to have a decent and comfortable life in Paris .
And you're talking $1,000 per month . That would cover food and clothing and shelter , right Right , wow , so that's why the baby boomers are headed that way , that's incredible . Well , you know , eric , I think NAR put a study out a couple of years ago about baby boomers and the fact that every day 10,000 baby boomers are turning age 65 .
And so that's retirement age .
And so a lot of those people are making their plans to move into other countries into Portugal , into Panama , into Costa Rica , different places like that because they find it more economical to live a lifestyle that they had here , but yet do it on less money , because a lot of people didn't save a lot of money during the working years because they couldn't .
They had children to put to school and college bills and things like that . So you know as well as I do to find an economical place to live is what you would need at that very last chapter of your life . Which brings up one question I have about hospitals and medical facilities and things like that .
In Panama , I know you and I had a discussion about a certain medical procedure and how more economically it was there than here in the United States . I mean , does that hold true with medicine and doctors and hospitals as far as having a better price than we do here in the United States ?
Definitely Most of the people that retire to Panama . They do have their own insurance and most of the insurance works in Panama with no problem . At the same time , the cost of going to a doctor or a clinic is very , very , very low compared to the States .
So whenever you go , you have an insurance in the States and you have to pay your monthly payment to your insurance once you retire . Whenever you have to visit a doctor , you have to pay something , or it's 100% cover , you have to pay a deductible usually Absolutely .
There's a copayment , that's what we call it here .
Okay so at the end that copayment will be equivalent to what I believe that the cost of the visit of the doctor will be here in Panama . So it's definitely cheaper . It's less expensive than in the States . That's what a lot of people that are retiring in Panama tell me . Whether my insurance doesn't cover , or if my insurance covers , there's no problem .
But if it doesn't cover , the actual appointment with the doctor or whatever I need here is so economic compared to other countries , compared to the States or Canada , so they feel very comfortable about it .
I want to get into a couple of other things about a school for expats . They're there doing digital nomads , I think is the name for it today .
¶ Panama Property and Education Options
But first , what about a certain requirement to purchase property in Panama ? A foreigner can come to Panama and purchase property . Is that correct ?
Anyone can come to Panama and buy a property and have the same treatment as a Panamanian . They have the same treatment . If you come , come to Panama and buy a property and have the same treatment as a Panamanian they have the same treatment . If you come tomorrow to Panama and you buy any property , you will be treated the same as if I buy it .
It's the same treatment for everyone .
Okay , so there's no process about the visa that we have to have or our no , you can buy a property without having a visa with no problem .
But at the same time , if you want to have a visa , there are some incentives for investors as well . There is a visa that is called permanent residence for qualified investors . That's the one that you can buy a property of $300,000 and you will get the permanent residence right away .
So you can be a resident of Panama with a $300,000 or more purchase of a residential property .
Exactly you have three options . Either you buy a property of $300,000 and the property will be you . It could be 500,000 , whatever , or x amount , but you have to pay 300,000 . You have to prove that you paid that amount .
Even you can get a loan for the difference , but the only thing that you have to do is give from your own funds and it has to be an international water transfer that comes to panama .
You have to show that you you did it water transfer and you did the payment from fronts over overseas , and then you will qualify to to get the residence as an investor buying a property . Or you can invest through a broker's house 500 000500,000 , or you can create a time deposit on a bank for $750,000 . And everybody prefers just to buy a property .
They have a return on investment . They can leave the property , depending on the building , on the project that they invest . Actually it could be an Airbnb unit , so at the end it's fantastic . So most of the people prefer just to invest $300 or $500 , depending on the taste or the budget that they have and they buy a property .
They have a return , they can have a valuation of the property , so it's the easiest way actually .
To go back to the moving into Panama and just say you're coming in and you have a family , a small family , and you know education is going to be at the top of their mind . The parents about providing a great educational program for the children . So what's available ? What's available there in Panama ?
school terms calendars . One is the same calendar that we call American system , or it's exactly the same year period that you have in the States , and then the other one is the Panamanian system , or the school year that goes from February to December .
So let's go the Panamanian system is they start school on February , they graduate or they finish the year in December , and then the other one is exactly the same the same months , from the States , and those are what we call international school or high school or elementary schools , that most of the people that come from international multinational companies , they put
their kids in that system , you know , just to make sure that they don't lose time from year to year when they travel from one country to another one . But we have a lot of alternatives . We have great elementary education here in Panama .
In reference to , for alternative , remember that all these multinational companies I don't want to say the name , but let's say Procter , gamble , ranger , l'oreal all these companies that they bring their staff here to Panama . They relocate , they bring their family , the whole family with the kids and everything .
So at the end they come here , they do the sightseeing , check where you're going to live and everything At the same time . They go to the school search and they coordinate everything through the relocation companies . And once they move to Panama , everything is set up and it's much easier , everything is completely smooth .
So you mentioned companies , these Fortune 500 companies , moving into Panama . Do you see a lot of ? I mean , what kind of mix do you see coming in ? Do you see a lot of technology companies coming in ? Have you seen an influx of new companies over the last two years ? What's the status of that ? What do you see moving into Panama at this time ?
Okay , right now we have over 140 multinational companies that are working in the country of Panama . Most of them are in the city and it's a mix . It's a mix of services , technology , logistics . There's a lot of companies that they finish the manufacturing locally and they re-support it . So it really depends on what are the needs we do have a lot of .
¶ Panama
When we talk about visas , a different type of visas we have , we feel that we have like a big catalog of visas focused on what people will need .
That's something that , during the last years , panama have been working pretty hard just to make sure that we're more and more competitive and basically , you told me what kind of business you need and I can assure you that we have a one that is like just fixed for you . So at the end , it's something that people are going to see .
That makes the country more attractive as a whole .
Sure it does . Sure it does . In talking about people moving into the country and I know that there's specific neighborhoods that are designed for , kind of you know , home to home , living side by side , subdivisions and things like that what type of security do you find in those neighborhoods ? I mean , are they gated ? Do they have surveillance ?
I mean what would be security systems in those ?
neighborhoods to protect the residents .
Well , when we talk about these gated communities , it's very similar . Let's take as an example Miami . If you go to Miami , you have Kendall , you have Doral , you have all these different neighborhoods and whatever you have there is very similar to Panama . We do have security guard at the entrance . It's a gated community . You have cameras also if you need it .
Actually , it's not that we need it because the security is very good on all these neighborhoods , but it just gives you know this comfort that you know that it's secure and , for instance , where I live , we just love the house . At the end of the day , my door is always open , so we feel that it's quite secure .
We do have a guard at the entrance and the gate . You know that is normal , but in general it's very similar to the States and it's something that gives you that you know that piece of control . You know , probably , that people feel that their kids are secure , they're safe while they're working .
Sort of peace of mind , Right exactly .
That's the right word .
What about shopping centers ? People love to get out and shop and I've been downtown in Panama City and I've seen a lot of stores there . But as you move into the suburbs , what about shopping centers and things like that for people to get out and have entertainment as well as shopping ?
Actually , we do have all kinds of alternatives . We have big shopping malls and we have all these big brands and fancy brands and we also have street malls .
So , for instance , in the area of Costa Rica and Santa Maria , we do have actually one big shopping mall that is the most modern one actually , and at the same time we have a lot of street malls , street classes . So we do have all kinds of services . We have drugstores , laundry areas , I mean laundromatic services .
We have doctors , clinics just give me one service . We have everything . We have theaters , dentists , you know all kinds of services on these three classes . So at the end , we feel that we have everything there . We have all these services that are up to a point that you don't need to get out of the neighborhood . You have everything there .
And that's the same thing on these two that I mentioned , the same as San Francisco or Barrio , or right now my office is in Paitilla . We have all kinds of services around , so we don't need to move out . Everything is walking distance actually .
Well , see the reason I'm bringing this up ? Because , as you and I talked earlier , before we even started the program , a lot of people know Panama , they know the Panama Canal Zone and they don't know much more about what Panama is all about .
And all sorts of people , from retirees to you , know the younger people that have gotten out of college , that have been shipped off there to work with different companies and it's just a best all around world for anything that you would want . And also , let's talk about climate , and then we'll move on . Tell me about the climate Now .
We always hear about the rainy season and the fact that you've got that going on , and I think today you have . Like . The temperature is probably about 82 degrees .
Fahrenheit .
And maybe you had a little bit of rain this morning .
But what's considered the rainy time for Panama ? Actually , we do have a lot of rain . I can , I can light about that , but in general , uh , when it's like rainy season , uh , the last months we can say there are from , uh , probably august to november more or less .
So there's a few months where it's more rainy itself , but in general when it rains it's like in the afternoons , not in the morning , so we can work around that . And then , basically , what is December , january , february , march ?
it's like summer so
¶ Luxury Property Investment in Panama
.
I think that we have a lot of alternative , a lot of things to do in the country , so raining is not an issue , definitely if you're planning to walk from your apartment to the office you have to think about it , you need to get your umbrella . you know that's normal . It's walking distance from you know , from the , and that's what people love to have .
They love to work very close to their offices . When we talk about these multinational companies , all their , these young executives , that's the way that they do . They love to , even in scooters . They drive , they take their scooters and they go to the office .
You know we've talked about property and I think now's the time to let you show one of your properties . That's fairly new , Okay , and you can tell a little bit about it as soon as you pull that up and share it with the viewers . I have this project called Bioma .
That is a new project . Actually , it launched less than 11 months ago 10 months ago more or less and right now , bioma is a new project that is going to be constructed in Costa del Este neighborhood . It's a very modern concept that you have all these amenities you have , as you can see right now , is a big building .
You have very ample terraces and high ceiling . The distance between floor and ceiling is 3.2 meters . Okay , so it's considered a very ample apartment . When we talk about the amenities , you're going to have all kinds of restaurants . You're going to have a two-star Michelin restaurant on top . You're going to have a heliport .
There is a big demand right now for these units . Believe me , we do property management for the last 24 years and we don't have any vacant unit in this area because there's a huge demand .
So let's talk about that . I think you mentioned that it went on the market . I mean like pre-construction contracts . Maybe it's 70% sold at this point in time . Yes , it's incredible that happened over eight months Over almost ten months , ten months . Okay , that's fantastic . It looked like at the very top that there were three-story penthouses .
Actually it's not a penthouse .
It's the social areas . You're going to have a heliport on the top . You're going to have a huge and very elegant restaurant with two Michelin stars . You're going to have all kinds of amenities . I will send you the presentation so you can add it later on .
And at the end , it's a project that just by who's the developer , who's behind behind , having sold pretty fast and the experience and all the expertise that the previous project that the developer have done with fantastic results . People love it . People love it . So I will send you the information later .
So if you could give us just maybe one prize for and I think you said that you know someone purchased one , there was that a two-bedroom , three-bedroom or what no , I told you that I bought one there , okay okay , you bought one there .
That's an investment point of view or an investment property , my own house , so but I , I have three kids , so I have to think about them too , you know . So at the end , um , at the end , let's say what is the price per square meter . We can get an apartment of one or two bedrooms , let's say two-bedroom apartment , for around $390,000 .
We're talking about like 85 square meters , more or less , and with one parking space . But you have all these facilities . You don't need to move out from the building , okay ? So these projects are the ones that people are looking for .
Now , as you mentioned , people are working more and more from home and this building has all these , as I mentioned , all these facilities . You know that you can have meetings on different spots from the building , that you can have the social areas , the sport areas . It's something out of this world .
It's a unique project and again tell us where that's located .
That one is in Costa del Este , okay , okay .
How close is that to downtown ?
We're talking about driving time , probably like 10 , 15 minutes .
Okay , Okay , In the specific one that you purchased , what about the we call it here in the United States the HOA fee ? What would be your monthly assessment or monthly fee that you would have to pay ?
On this one . We call it maintenance fee . That is the same right . This one is 2.75 per square meter . Okay 2.75 cents per square meter .
Okay , okay . And you said how many square meters in the one you purchased .
The one that I purchased is 130 plus 30 of balcony .
Okay , okay , I tell you it's a beautiful property . And if you're 70% sold out .
it's going to be sold out by the first quarter of next year , I feel certain about it .
It's fantastic , it's incredible Moving right along . Are there any selling restrictions ? Once I buy a property in Panama and I'm not necessarily a resident there any selling restrictions on me when I sell the property or make a decision ?
to sell . No , there's no restriction at all . Once you own the property and you want to sell it , you only have to pay the sales tax to the government . You need to pay 5% of the sale value .
Okay , okay , I mean this is kind of a no-brainer as far as a question to ask you , but looking at the property that we just saw and looking at other properties in Panama , what does it look like over the next three years ?
In your mind as far as growth , as far as the values going up or down , there's always , you know , depending on the point of view of view of person .
No one has like what we call , you know , the crystal ball used to to figure out how it's going to be the market what we have to check and and be very I'm always positive . You're not an optimistic , but we have to be realistic as well . So I believe that there is no way that I can tell you the expected growth will be around 10 , 50% .
I cannot assure you that , but what I can tell you is that we are building these projects because we are out of stock . People feel that we need it actually , and then Panama is being very competitive during the last years and the forecast that we have is that we're going to keep on that track .
So I think that , based on this information , we feel that it should have a very attractive return .
I cannot give you a specific number , but what I can tell you is that there is a lot of investors that , let's say , 12 years ago or 10 years ago , they bought property and nowadays that property is like three times current value , so it is attractive as a global realtor and your involvement for many , many years in Panama .
What would be if you were talking to a person that just had the thought I'd like to move to Panama ? What would be one of the first things you would tell that individual Not necessarily to persuade them , but just based on your experience about why they should move to your country ?
I think that Panama is unique . Honestly , I feel that we have our connectivity and our geographical position makes Panama more and more attractive in comparison to other countries . There is a lot of incentive and benefit of living in Panama . There's a lot of people that they don't know that Panama is a very small country with a lot of benefits .
As you know , we have a world-class logistic platform , we have the US dollar as legal currency , we have a great and very stable international banking and financial center , and we do have high-quality education , world-class communication infrastructure .
So at the end , when someone is considering to move out from their country to go to another one , just to restart or start working on another business or something , or just relocate for any reason , they have to consider that they need to have a place that gives you all this incentive or attractiveness you know .
So they feel that it's a good idea just to move to another country . There are other neighborhoods .
you know , we have Colombia , we have Costa Rica .
We have Costa Rica . For so many years have been working on tourism and nature , you know , and they have done a quite good job . On reference to the branding , you know in tourism and well . I believe that every country has their own , you know , incentive and benefits . So that's why a lot of people are moving to Panama .
Okay , so yeah , I get it .
Yeah , I don't like to compare talk about other countries , but in general every country has their own unique you know their own benefits , but I feel that Panama is doing quite good .
Yeah , I just wanted to give you the opportunity to sell Panama because people need to hear you from your point of view , and so you know you're a native there . I mean , you were born and raised there .
Yeah , I think that Panama has a lot to offer . I believe that , as I mentioned again , the geographical position helps a lot .
The distance from here to the States , from here to yeah , just to Miami we're talking about a three-hour plane , so it's a flight so it's a flight , so it's very close and once you get here , you're going to feel that you're in the States . It's very , very similar the language , the dollars , the currency the food the lifestyle .
Everything is very , very similar to the States .
So people feel comfortable and , believe me , there's a lot of Americans that move to Panama and they really enjoy it . That's for sure .
We have tropical culture . But it's cool , it's very nice .
Listen , it's been a pleasure having you today .
And .
I do want to get back with you a little bit later in the year and talk a little bit more about Panama and what's happening , because it's evolving , it's
¶ Real Estate Market Update and Friendship
changing . I mean , new people are moving in , new construction's coming up all the time and I would like to see more inventory at some point in time . Maybe we can do this mid-year and just do a quick update on where we are today , where we're going to be then and , like I said , it's always good to talk to you .
Eric and I go way back and every time we have meetings with the International Real Estate Federation , we always have time to sneak off in a corner and catch up and talk a little bit about personal life as well as business , and I really appreciate corner and catch up and talk a little bit about personal life as well as as business , and I really appreciate you
and evelyn and your family and we'll get back together soon . Thank you so much for being here thank you actually .
You have a great time with you and you're a fantastic friend . Thank you thank you .
Thanks for joining in on today's episode of RealtyCast Global . Make sure to subscribe to the podcast to be notified when new episodes air .