The report, which ranks Panama City among 12 second-tier cities which will see strong residential property price growth over the next five years, is likely to "out-perform the real estate markets in prime world cities" namely London, New York, Hong Kong, Singapore and Moscow.

"Canny investors with an already full 'trophy asset' portfolio are looking with more interest at the yields available from real estate," said Paul Tostevin, associate director of Savills World Research.

"Those looking for income-producing properties are more likely to find high and rising rental incomes in the places where capital values have not been driven by ultra-high-worth-individuals' inward investment."

Famous as a financial hub, Panama currently attracts the most foreign direct investment (FDI) in Latin America according to data from the International Monetary Fund (IMF). The country's business climate continues to attract foreign businesses and FDI in 2013 was the equivalent to 8.8% of Panama's $26.8 billion economy – a higher rate than any country in the region, according to analysis by the Latin Business Chronicle.

Expansion of Panama Canal a Powerful Boost to the Economy

"The foreign investor finds everything here," says Nicolas Ardito Barletta, the president of the PanAm Development Corporation, a regional business-services firm based in Panama City. Barletta points to carrier Copa Airlines, Panama's expanding international airport, the canal, ports, telecom infrastructure and Panama's geographic location as the key components to the country's recent success. "The advantage is the connectivity," says Barletta, a former president of Panama who also heads Panama's private sector-led National Competitiveness Centre, or CNC, which guides the government on meeting competition-boosting priorities.

Panama's biggest asset is the Canal which currently generates an average of $2 billion in revenue every year. The Canal is currently being expanded at a cost of $5.2 billion which has attracted significant foreign investment. Once the expansion is completed towards the end of 2014, revenues are expected to more than double to $5 billion per year and Panama will lead the world in generated revenues per capita.

Construction of the first Metro system in Central America in Panama's City centre is also underway with Line 1 having been completed in April this year with the second line scheduled to be up and running in 2017.

Location of the World's Biggest Infrastructure Projects 2014

Robust economic factors and world-leading infrastructure improvements combine to make Panama a top investment destination in 2014. Residential property prices will reflect the improved investor optimism and it would appear that the country is continuing along a very steep growth curve which is sending out 'buy' signals to investors around the world.

Candy GPS Report PDF