Until recently, the residential real estate market in Panama is the hottest thing in the country if not in Latin America. But this has changed lately. Due to oversupply, as land owners in Panama looking for a quick buck put up their lands for sale, the demand was not able to cope up. The rising prices of lands in Panama have also discouraged foreigners in buying lands at the country. Apart from that, Americans have also been held back by a controversial visa law.

All is not lost for those who have already invested in the Latin American country. Experts are saying that the Panama commercial real estate market is set to get a big boost. The reason for this expected boost is the ongoing expansion of the Panama Canal. The country has earmarked $5.2 billion for the expansion of the Panama Canal. The said expansion is expected to facilitate the entry of more multinational companies in Panama. This increased arrival of multinational companies will mean increased number of business establishments that will be put up in the country.

Shannon Robertson, managing director of Jones Lang LaSalle for Latin American operations said: "There's a lot of residential product that needs to be sold. We expect prices to correct or developers to hold on to their products. There's no question that from a residential market view, Panama City got overbuilt very quickly. It became the flavor of the day."

In the past, Americans have been attracted to the prospect of settling down in Panama. Last year, the price of Panama real estate has gone down to record levels and it certainly had Americans scrambling to get their hands on prime real estate in the Latin American country. The higher value of American dollar compared to Panama's currency made settling in Panama more attractive. Those who are about to retire are some of the most attracted people.

The number of foreigners expressing their willingness to buy real estates in Panama has created an increase in the price of parcels of lands in the Latin American country. In the past, it is easy to find low-priced real estate; it is one of the reasons why foreigners have been coming to Panama.

With the prediction that the commercial real estate in Panama to get a boost, it still makes sense to invest in the Latin American country. As companies invest in Panama, they would be looking for real estates where they could set up their business establishments. If one is wise enough to buy real estates in the right part of Panama, they can expect to reap benefits from their investments as large companies would be looking for prime real estate for their establishments.

Meanwhile, Paul McBride, Chief Executive Officer of Prima Panama, a real estate consulting firm had this to say: "Oversupply in Panama City will begin to become a problem in the next 12 to 18 months. Increasing prices in the residential retail sector along with a tightening international credit market will likely slow demand."