Greetings from sunny Pedasi, Panama and happy holidays from the team at Panama Sovereign Realty! It’s been a great year for the Pedasi real estate market and all signs point to an even better 2022. We hope our 2021 Pedasi Real Estate Year in Review is helpful to you. Please be sure to sign up for our newsletter on the right (or below on mobile devices) to stay in the loop about new listings and Pedasi market trends.
The pace of real estate sales this year has exceeded our expectations, especially given the social and economic uncertainty associated with the ongoing pandemic. Demand for both properties for sale and for rentals is as high as we’ve seen it in years. Developers and property owners are building new residential and commercial developments in and around Pedasi.
Specifically, there are new projects either under construction or on the way soon in the immediate outskirts of Pedasi town (walking distance to town and the beach), in the luxurious beachfront and ocean view environs of Los Destiladeros, in the small fishing village of El Ciruelo, and perhaps most notably at the world-class surf beach of Playa Venao. Coming off of a great 2021, we’re bullish for the Pedasi and Playa Venao real estate market in 2022.
2021 Pedasi and Playa Venao Sales Snapshot
Sales of both homes and land in Pedasí and Playa Venao were brisk in 2021. Strong demand accelerated the absorption of existing inventory. Construction starts are also at an all-time high. This is not only compared to 2020, but also compared to years prior. Roughly 40 single-family homes sold in the area in 2021, as well as a couple of dozen condominium units. Many of these were new beachfront offerings in Playa Venao.
The average sales price of single-family homes was around the mid $300,000s. Turnkey, beachfront developments at Playa Venao were a strong contributor to the overall sales volume, as were finished homes under $300,000 in Pedasí.
Because of the strong home sales in 2021 there is currently a lack of finished single-family home inventory in the Pedasi area, especially under $500,000. We still have a few left but they are selling fast. For those of you who aren’t ready to move quickly on a home purchase, the good news is that several developers are building new homes in Pedasi, Playa Venao and the surrounding areas that will boost available inventory. Delivery dates for these new homes will be late 2022 and into 2023. If you haven’t already done so, now is the time to sign up our mailing list so that we can share more details with you as they become available.
Sales of building lots have also increased throughout the region. We estimate that in the District of Pedasi (including Pedasi, Los Destiladeros, El Ciruelo, Playa Venao, Cañas) buyers acquired approximately 70-80 home lots in 2021. Not too shabby for a district with a population of just under 5000 people- especially when you consider that that the vast majority of these sales did not involve bank financing. The average price of a homesite was roughly $75,000, though per meter prices vary widely. Small lots near town can sell for $30/m2 while a similar sized beachfront lot at Playa Venao may fetch up to $400/m2.
Prices Trending Upward
From raw land to finished homes, real estate prices in our area went up in 2021. Compared to a year ago, prices in Pedasi have risen by about 10% and in Playa Venao we’ve seen roughly a 20% increase. There are several key factors driving these increases:
– Pandemic-driven lifestyle changes
– Hyper-competitive real estate markets in North America and Europe
– Improved local infrastructure
– Global supply chain disruptions
First, the pandemic has created a shift from living in crowded cities and suburbs to living in more sparsely populated rural areas. This seems to have contributed to a growing interest in buying and renting in rural beachfront communities like Pedasi and Playa Venao. In fact, people who own rental property in Pedasi are seeing the highest occupancy and rental returns the area has ever seen, both from expat and Panamanian renters. The growing demand for safe, affordable housing, coupled with a relative scarcity of supply is having its predictable upward impact on prices.
Next, many buyers from North America and Europe are taking advantage of low interest rates and historically high home prices in their markets to pull out capital and reinvest in places like Pedasi. Prices here, while rising, still compare very favorably with places like Florida and California where prices have skyrocketed and buyers face bidding wars. Furthermore, most of our buyers do not finance with local banks (relatively high interest rates, lots of red tape), so the capital they can draw on from an existing home is very helpful.
Ongoing investments in area infrastructure and amenities are making Pedasi a more desirable place to live and work. Fiberoptic internet is now widely available, allowing more people to study and work from home. Getting to and from Pedasi, Playa Venao, etc., has never been easier or more comfortable. Air Panama has just started flying twice a week from Panama City to Pedasi. The main highway system in our area is also practically brand new. Pedasi even has a new private medical clinic to supplement the public hospital that opened in 2017. The private school “Manglares” near Playa Venao has increasing enrollment, giving parents a great schooling option in the area.
Putting additional upward pressure on local prices are the continued disruptions to global supply chains as well as rising fuel costs. Both of these lead to increases in the cost of materials, thereby increasing the cost of construction. For example, the price of steel, which is mostly imported into Panama, rose steeply in 2021. Finished imports like doors, windows, roof tiles, etc., are also more expensive. Put simply, it costs more to build a new home in Pedasi today than it did last year. In fact, several clients who recently purchased in Pedasi have mentioned rising construction costs as a motivating factor in their decision to buy a finished home now instead of waiting for a new build.
Adding potential fuel to the fire, the global supply of money is at an all-time high, and inflation expectations and actual inflation are both on the rise. It may be too early to tell exactly what impact the current inflationary period will have on our local real estate market, but we have our eye on it.
In summary, coming off the back of the 2020 pandemic, aka “the year the world stopped”, 2021 has really exceeded our expectations. Covid took its toll on tourism and real estate in Panama and the Pedasi area and the uncertainty caused by the pandemic is an X factor that can’t be ignored. But the pace of real estate sales in the Pedasi area in 2021 serves as a compelling indicator of a strengthening Pedasi real estate market. Both Pedasi and Playa Venao offer a ton of value right now compared to other communities around Panama and the region. Given Pedasi’s prime position as a warm, safe, friendly beach community and our improving infrastructure, we expect continued strong demand through 2022.
While 2021 was a great year and the trend is going in the right direction, if you’re a buyer it’s not too late to find great value in the Pedasi real estate market. Many investors who were astutely “waiting for the bottom” before getting in have already made their move. But if you haven’t bought yet it’s not too late – things are still just beginning to pick up and there is plenty to get excited about if you’re considering buying. And if you’re a seller or thinking about selling, we may already have a buyer for you. We have a waiting list of buyers who are looking for certain types of property. We look forward to connecting with you soon.
We appreciate you taking the time to read this 2021 Pedasi Real Estate Year in Review. To stay in the loop on market trends and new Pedasi area listings be sure to sign up for our newsletter using the sign-up form up top (desktop users) / below (mobile users). We’ll make sure to keep everything short and sweet with only the most important updates.
We also invite you to follow us on Facebook and Instagram where we’ll be a little bit more active with updates and new property listings. And don’t miss out on our interactive DRONE TOURS where you can get a bird’s eye view of Pedasi, Los Destiladeros and Playa Venao not available anywhere else online. Finally, please be sure to let us know if anything else catches your eye on our website.