Panama Is Short 180,000 Homes and Cannot Sell the 2,536 It Has Built

Real Estate

Key Facts

—The fall. Panama sold 4,020 new homes in 2025, down 34.4% on 2024 and down from 7,687 in 2023.

—The paradox. The country carries a housing deficit above 180,000 units, yet ended 2025 with 2,536 unsold.

—The squeeze. Mortgage approvals at this year’s property fair fell more than 70%, to just $34m.

—The mismatch. Roughly 77% of unsold stock sits between $50,000 and $180,000, the bands banks are most reluctant to finance.

—The cost. Construction is more than 15% of GDP, down from 19% in 2019, and has shed about 40,000 direct jobs in five years.

—The forecast. Developers expect around 2,000 units to sell in Panama City this year.

Panama housing sales have nearly halved in two years in a country that is short of housing, which sounds impossible until you look at who is allowed to borrow.

The developers’ council consolidated the figures. Panama sold seven thousand six hundred and eighty-seven new homes in 2023, six thousand one hundred and twenty-six in 2024, and four thousand and twenty last year.

That is a fall of about thirty-four percent in the latest year alone, and roughly a halving across the two.

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The Panama housing sales paradox

Set two numbers side by side. Panama’s housing deficit runs above one hundred and eighty thousand units.

Unsold inventory at the end of last year was two thousand one hundred and twenty-two houses and four hundred and fourteen apartments. Two and a half thousand homes cannot find buyers in a country that needs a hundred and eighty thousand.

The council’s director puts the cause plainly, and it is not demand. It is a mix of higher costs, less favourable rules and restricted credit.

The inventory breakdown proves the point. Eight hundred and forty units sit between fifty and eighty thousand dollars, six hundred and five between eighty and a hundred and twenty thousand, and five hundred and eleven between a hundred and twenty and a hundred and eighty thousand.

That is roughly seventy-seven percent of all unsold stock priced squarely for the middle class. These are not luxury towers waiting on a foreign buyer; they are ordinary homes waiting on a mortgage.

What the property fair revealed

The brokers’ association published its own numbers today, and they are worse than the sales data. Mortgage approvals at this year’s property fair fell more than seventy percent against previous editions.

Only thirty-four million dollars of mortgages were approved, and around six hundred transactions closed. The association called it a negative milestone for the sector.

A property fair is where motivated buyers meet motivated sellers, so it is the cleanest available test of whether willing purchasers can actually complete. On this evidence, most cannot.

The organisers point at the labour market. Roughly a hundred and twenty-five thousand Panamanians lost jobs from 2023, and those who have found work again do not meet the parameters banks require.

Banks are described as very conservative below a hundred and twenty thousand dollars, which is precisely where the unsold stock is. Buyer and building exist; the loan does not.

The rules changed underneath the market

Two policy changes recur in every account. The preferential-interest regime, which subsidises mortgages within defined price bands, was reworked, and the property transfer tax was reactivated.

Consultants tracking the market report that the uncertainty pushed both buyers and developers toward premium vertical projects that sell quickly, deepening the fall in horizontal housing. The subsidy was designed for the fifty-to-a-hundred-and-eighty-thousand range, and that is the range now sitting unsold.

The macro stake is large for a country of Panama’s size. Construction contributes more than fifteen percent of output, down from nineteen percent in 2019, and has lost around forty thousand direct jobs in five years.

The geography concentrates it further. Panama City holds one thousand two hundred and seventy-nine unsold units and Panama Oeste one thousand two hundred and thirty-seven, while Coclé has twenty.

Developers expect around two thousand sales in the capital this year, which would be another step down. Unblocking preferential housing, the council argues, would be the single measure with the greatest social and economic impact.

One counter-current is worth noting, because it complicates the gloom. Official registration data for 2025 showed total properties down only two point eight percent, with houses falling six and a half percent while apartments rose eleven.

Those are different instruments measuring different things, and the divergence is informative rather than contradictory. Registrations capture completed legal transfers across the whole market; the developers’ figure counts new units sold.

Read together they describe a market rotating rather than simply shrinking. Money is still moving, but into apartments and away from the houses that dominate the unsold pile.

For a foreign buyer that rotation is the practical signal. The segment under stress is the domestic middle of the market, which is exactly the part a mortgage-dependent local buyer needs and a cash purchaser does not.

How far have Panama housing sales actually fallen?

New home sales fell to 4,020 units in 2025 from 6,126 in 2024, a drop of about 34%, and from 7,687 in 2023. The developers’ council describes the two-year decline as exceeding half the market.

Why can’t buyers purchase if there is a housing deficit?

Because the constraint is mortgage credit rather than appetite, with banks unusually cautious below 120,000 dollars and many applicants unable to meet lending criteria after job losses since 2023. Changes to the preferential-interest law and the return of the transfer tax added cost and uncertainty on top.

What would fix it?

Developers argue for unblocking the preferential-housing regime, calling it the measure with the largest social and economic effect available. Brokers separately want banks to assess applications case by case rather than applying blanket caution to the price bands where most unsold stock sits.