New Roads Drive Buyers in Panama
When former Panamanian President Ernesto "the Bull" Balledares purchased property near Rodeo Viejo in 2004, the only access was a dirt road used mostly by farmers and villagers coming down from neighboring mountain towns. Prices were less than $1,800 per acre.
But upon executing a convenient new government road project to the destination, real estate prices shot up to over $8,400/acre, an increase of 400 percent.
Today, the past seems to be repeating itself as Panama City, Panama's most famous surf beach, Playa Teta, is getting a makeover starting with a paved road covering the 1.2 kilometer stretch from the Pan American Highway all the way down to the beach.
Developers began months ago on new projects in anticipation of the announcement, and property values are expected to follow a similar (if not more emphasized) trend.
It happened first in Costa Rica in the '90s and it happened in Panama's Playa Venao: dirt roads keep people away and keep land prices low...
The government announces a road development project with little fanfare...
Then the speculators move in.
And once the new road project is completed, the masses follow suit.
But information on new road projects is kept closely guarded, with government insiders typically the only ones in a position to capitalize.
And this series of events is now predicted to take place in Punta Barco, the beach town next door to Coronado, as its new government road project unfolds over the next three months.
Known for the consistent surf at Playa Teta, Punta Barco will change in 2014 as developers are seeing strong sales on the four residential projects directly accessed by the newly-announced paved road.
The most impressive of these projects by far is the Punta Barco Country Club, which will feature 180 homes within a gated community, offering luxury-style amenities at a "mid-range" price point.
Carved out on 10 hectares, the development group Davivienda is looking to fill a niche on the beach that's seen strong demand from foreign buyers and upper middle class Panamanians: Single Family Homes under $250,000.
On the heels of this new road announcement, and before they have even completed their model showroom, reports show that Punta Barco Country Club has sold more than 30 homes "off-plan" in the gated community, which is a small but very obvious indication that early buyers knew about the road and knew that prices are going to be shooting through the roof in this, a previously sleepy surf beach.
Investors will be watching this development and others closely as the new road moves in and the area gains popularity through better access from Panama City and Coronado. Kent Davis runs a boutique Panama real estate agency, Panama Equity, and has been living in Panama since 2007.