A major driver of GDP growth over the past decade, the construction sector generated more than $2.5bn in 2013, accounting for around 9% of GDP, a year-on-year (y-o-y) increase of 30%, according to the Panamanian Chamber of Construction. Public infrastructure works are leading this surge, but the private sector is also playing a significant role through residential and commercial developments. The real estate sector is also experiencing a boom supported by real demand and increased purchasing power among the local population. Preliminary data released by the National Institute of Statistics and Census indicates that real estate, corporate and leasing activities expanded by an average of 10.3% y-o-y during the third quarter of 2013. While prices are slightly on the rise in both residential and commercial segments, indicators suggest that the market is cooling off and reaching a healthy equilibrium. Even so, tax incentives are set to maintain demand and continue to attract foreign investment.
This chapter includes an interview with Victor Alberola, President, Fomento de Construcciones y Contratas Central America.