Panama’s residential real estate market is contracting sharply, with new home sales plunging 34.4% in 2025 to just 4,020 units, down from 7,687 the previous year.
The slump underscores a structural mismatch in the Central American economy: despite a reported housing deficit exceeding 180,000 units, demand for newly built properties has evaporated.
6 million in reduced lending, suggests developers face mounting headwinds in financing new projects even as inventory moves slowly.
The sales collapse coincides with a tightening credit environment that has already begun to weigh on the sector.
New bank lending in Panama contracted by 7.1% in the first five months of 2026, with construction and housing finance bearing the brunt of the decline.
The drop in credit availability, equivalent to $783.6 million in reduced lending, suggests developers face mounting headwinds in financing new projects even as inventory moves slowly.
This deterioration in the housing market adds to broader economic uncertainty in Panama.