Saturday, February 23 2013 @ 09:47 AM EST
Contributed by: Don Winner
During 2012 there was an increase in real estate deals in residential and business properties, after a massive opening of buildings that were under construction, according to members of the Panamanian Association of Brokers and Real Estate (Acobir).
According to figures from the Panama Economy Insight consulting firm, the growth rate in this sector in 2012 was 11%, almost 4 percentage points more than in 2011.
Although Acobir members agree that the market is growing, since the 2008 crisis, the mishandling of information keeps the number of transactions from being even greater, or for them to be executed with total transparency.
Panama's Authority for Consumer Protection and Competition (ACODECO) received 3,055 complaints between May 2006 and January 2013 filed against property developers.
In response to these problems, Acobir recently launched a tool designed to manage and provide greater accuracy in the property sector.
"With the multiple listing system (MLS, for its acronym in English) Acobir has a clear set of rules that facilitates the handling and exchange of information for the benefit of buyers, owners and the housing market in general," explains Nicole Tribaldos , administrative manager of the Tribaldos Real State Corp., an Acobir member.
The tool works through a multiple listing, an exclusive database that is shared among the 276 registered commercial agents representing over 100 real estate companies who are members of Acobir.
By concentrating all market information in one place (www.mlsacobir.com) the offer accurate and current figures of the sector and the real prices of each property.
"With this tool the activity in the sector will increase, because both the seller and the buyer will have access to current and transparent information. This gives greater credibility and certainty to the market," says Frank Morrice Arias, the manager of Semusa Realty.
The Parties will act, during the entire transaction process, under the terms of a previously signed contract to provide benefits for those involved.
Of these 3,055 complaints published by Acodeco in its last report in February 2013, involving a total of $223.5 million, 85 were due to a lack of information ($2.6 million); a line that sits in seventh place out of 20 that are registered in the report.
As a consequence of the strong competition that exists in the business and with the desire to get the commission, some agents may take information without authorization from other partners, and offer the property for sale at a cheaper price as if it were their own, making it more attractive for sale.
This is one of several cases mentioning by Acobir members, who recognize the "prostitution" that exists is in terms of the information used in the market.
Eric Van Hoorde summarizes the tool as the preamble to an era that will work with real and transparent information, and that gives peace of mind and confidence.
The commercial market continues to rise -
"Right now we have a lot of supply in business unites and office buildings," says Aracelli Roy de Jaen, director of the Tribaldos Real Estate Corp.
"The residential inventory has been consumed quickly after the opening of several projects in 2012," she adds.
According to a study conducted by CBRE Richard Ellis, the average rental price per square meter during the second half of 2012 was $40.16 per month for Class A commercial centers.
What's more, the increase moved the average sale price to $3,245.50 per meter for the month.
In this semester, Panama City still has commercial office building projects that are still at the early phases of construction, such as moving earth and the implementation phase.
There is some 25,000 square meters under construction in the banking district, another 86,810 square meters under construction in the Southern part of the city (San Francisco, Marbella, Bella Vista and Avenida Balboa) and an additional 50,539 square meters under construction in the Costa del Este area. These are the primary sub-markets that continue with the most square meters of new space under construction.
In the office market, the average rental price increased slightly from $23.30 to $24.41 per square meter per month, compared to the previous quarter/
The sales price decreased slightly from $2,844 to $2,557 per square meter.
In the residential market, figures from the first half of 2012 show that the average rental price fell to $11.31 per square meter compared with the previous quarter, and the average sales price decreased from $2,590 per square meter to $2,112 per square meter. (Prensa)
Editor's Comment: I will be meeting with Frank Morrice from Semusa on Monday. He's been wanting to tell me about their new MLS initiative. Many people have tried to start an MLS system in Panama in the past and they have all failed for one reason or another. Just looking at this most recent ACOBIR system from the surface, it also seems doomed to fail for a couple of reasons. First of all, most of the real estate agents in Panama are not members of ACOBIR. Their organization is sort of an "old boy's" network, comprised of the small handful of real estate agents who ran the market before the boom started, and they make it hard for new agents to become members. When they do join, there's really not much of an incentive to stay - other than the fact that you can put an "ACOBIR" stamp on your website. The high cost / lack of benefits ratio usually causes most of the real estate agents to eventually depart. In looking at their new MLS which they are trying to launch, they only have about 180 properties listed which is less than one property for every ACOBIR member. The problem with all of these MLS efforts is that under most schemes the sellers are obligated to sign an exclusive contract with just one listing agent which prevents them from listing the property with anyone else. In this "free for all" market, there's a whole lot of downside. Anyone who really wants to sell their property will list their property with anyone and everyone, to increase their chances of finding a buyer who is willing to pay their price. The MLS only works when everyone is playing by the same rules. Hence, it seems to me like this most recent ACOBIR effort will also eventually stall.