Panama has attracted many British investors into the Central American property market in recent years, and it doesn't take an investment guru to realise why this commercial hub is so appealing.
 
Property prices in Panama City have been growing at an average of 25 per cent for the last two years, according to property agents David Stanley Redfern. In early 2006, Panama City property sold at an average of US$1,700 per square metre, and now the average price of a Panama City property is US$2,910 per square metre. 
 
The promise of strong returns on investments has enticed many buyers into the Panama property market, but that is not all that is attracting them.
 
"One of the greatest advantages for British investors is the strength of the pound versus the dollar," says Paul McBride, CEO of property agents Prima Panama. "Since Panama is a dollar-based economy, British investors enjoy an advantage when purchasing property because of the current weakness of the dollar."
 
So the current 'credit crunch' means property investors get more for their money in Panama, but this may also be said of many countries today. 
 
Panama, though, has other carrots to dangle before buyers - for starters it doesn't tax income from overseas sources.
 
In addition to this favourable tax regime, foreigners in Panama on a Tourist Pensionado Visa enjoy discounts of 10 to 50 per cent on products and services ranging from public transport to mortgage rates, and electricity to airfares and cinema tickets - and people as people as young as 18 can qualify for the discounts.
 
Investment is the word in Panama as the expansion of the famous 77-kilometre canal, costing US$5.3 billion, should be completed by 2014 and will more than double its capacity. This large-scale commercial investment has been matched by investment in the Panama property market from some well known sources - one of the world's shrewdest property investors Donald Trump, for instance, has built a US$260 million, mixed-use development called Trump Ocean Club in Panama City.
 
David Stanley Redfern tip the City of David (pictured) as having similar potential for growth as Panama City in the future, with developments early on the growth cycle and prices relatively low. A one-bedroom, fully-serviced apartment at The Best Western Condo Hotel and Casino in the City of David is available from £32,000.

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Article first published 7 May 2008