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Property prices in Arequipa are expected to rise in 2026, driven by steady population growth and infrastructure development.
As of September 2025, Arequipa's residential market shows strong fundamentals with moderate price appreciation, stable rental yields around 5.5-6%, and growing housing demand from both local residents and migrants. The city's GDP growth is projected to outpace Peru's national average through 2026.
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Property prices in Arequipa are likely to increase by 4-7% in 2026, supported by population growth of 1.3% annually and GDP growth projections of 3.5-4.2%.
The residential market shows healthy fundamentals with stable rental yields, declining unemployment, and increased housing transactions compared to previous years.
| Market Indicator | Current Status (2025) | 2026 Projection |
|---|---|---|
| Average Price per m² | US$1,300-1,400 | US$1,350-1,500 |
| Rental Yields | 5.49%-5.99% | 5.3%-5.8% |
| Population | 984,000 | 997,000 |
| Unemployment Rate | 5.5% | 5.0%-5.2% |
| GDP Growth | 3.5%-4.2% | 3.5%-4.2% |
| Mortgage Rate | 8.2%-8.3% | 7.8%-8.5% |
| Annual Price Growth | 9% (2025) | 4%-7% |
What is the current average price per square meter for residential properties in Arequipa?
Residential properties in Arequipa currently cost between US$1,300 and US$1,400 per square meter as of September 2025.
These prices position Arequipa as significantly more affordable than Lima, where prime residential areas reach US$2,000 per square meter. Arequipa's pricing represents a 30-50% discount compared to the capital city.
The city's property prices align closely with other major Peruvian cities outside Lima, reflecting increased local demand and steady economic growth. This pricing level makes Arequipa attractive for both local buyers and investors seeking value in Peru's secondary markets.
Current market conditions show strong fundamentals supporting these price levels, with consistent demand from both residents and migrants moving to the city.
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How much did property prices increase per year in Arequipa between 2015 and 2025?
Property prices in Arequipa increased at an annual rate of 3-7% between 2015 and 2025, with 2025 showing particularly strong growth of 9%.
This growth rate reflects both national trends and local factors specific to Arequipa's development. The higher end of the range typically occurred during years of stronger economic performance and increased infrastructure investment.
The 9% increase projected for 2025 represents above-average growth driven by surge in local demand, population growth, and improved economic conditions. This acceleration indicates the market's growing maturity and appeal.
These growth rates demonstrate consistent appreciation over the decade, making Arequipa an attractive market for property investment with steady, sustainable returns.
What are the average monthly rental yields in Arequipa right now, and how have they changed over the past five years?
Average gross rental yields in Arequipa currently range between 5.49% and 5.99% as of September 2025.
These yields have remained remarkably stable over the past five years, supported by steady demand from local families and ongoing urbanization trends. The consistency indicates a mature rental market with balanced supply and demand.
The rental market benefits from Arequipa's position as Peru's second-largest city, attracting both domestic migrants and young professionals. University students and working-age residents contribute to steady rental demand.
Compared to many other emerging markets, these yields offer attractive returns for investors while maintaining stability that reduces investment risk.
How many new residential construction projects are planned or under development in Arequipa for 2025 and 2026?
The Arequipa residential market expects a 15% growth in housing demand through 2026, driving increased new construction projects across the city.
Urbanization and population growth are the primary drivers behind this construction boom, with developers focusing particularly on affordable housing segments. Infrastructure upgrades and new projects are being developed throughout the city.
The construction activity concentrates on meeting demand from young families and migrants, with projects ranging from affordable housing to mid-market developments. Government infrastructure investments are supporting this growth.
While exact project counts require more detailed local reporting, the overall trend shows significant expansion in residential construction to meet growing population needs.
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What is the current population of Arequipa, and what is the projected population growth by 2026?
Arequipa's current population stands at approximately 984,000 residents as of 2025, with an annual growth rate of 1.3%.
Based on current growth trends, the city's population is projected to reach around 997,000 by 2026. This steady growth rate reflects the city's attractiveness to both domestic migrants and international residents.
The population growth is driven by economic opportunities, educational institutions, and improved quality of life compared to rural areas. Young professionals and families constitute the majority of new residents.
This demographic expansion directly supports housing demand and contributes to the positive outlook for property prices in 2026.
What percentage of households in Arequipa are currently renters versus homeowners, and how is this ratio trending?
A majority of Arequipa households are homeowners, following Peru's traditional preference for property ownership.
However, rental demand is increasing due to urban migration and a growing young population. The ownership rate is slightly declining as renting becomes more common among young professionals and students.
Informal housing arrangements still play a role in the market, but formal rental agreements are becoming more standard. The trend toward renting is particularly evident among university students and recent migrants.
This shift creates opportunities for rental property investors while maintaining strong underlying demand for homeownership among established residents.
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How many mortgages were issued in Arequipa in 2024, and what is the current average mortgage interest rate in Peru?
Peru's average mortgage interest rate currently stands at 8.2-8.3% as of mid-2025, affecting all major cities including Arequipa.
While specific annual figures for Arequipa are not available, Peru's mortgage credit growth has been robust with double-digit expansion over the last decade. Mortgage activity remained strong throughout 2024-2025.
The relatively high interest rates reflect Peru's economic conditions and central bank policy, but haven't significantly dampened housing demand due to strong economic fundamentals and employment growth.
Home buying activity increased in 2024-2025 despite interest rate levels, indicating strong underlying demand for homeownership in Arequipa.
What is the unemployment rate in Arequipa today, and how has it shifted over the last three years?
Arequipa's unemployment rate currently stands at approximately 5.5% as of 2025, following national trends.
The unemployment rate has improved significantly, declining from 6.4% in 2024 to 5.5% in 2025. This improvement reflects economic recovery and job creation across various sectors.
The three-year trend shows consistent improvement in employment conditions, with Arequipa generally tracking national employment patterns. The city benefits from diverse economic sectors including mining, agriculture, and services.
Lower unemployment rates support housing demand by increasing household income and confidence in making long-term property investments.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Peru versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How many international and domestic migrants moved to Arequipa in the past year, and what is the projection for 2026?
Arequipa experiences steady urban growth with the population increasing by 1.25-1.34% yearly, driven by both domestic and international migration.
The migration trend focuses on youth and working-age individuals seeking better economic opportunities and education. Domestic migrants primarily come from rural areas of southern Peru.
International migration includes Venezuelan refugees and other Latin American nationals, though domestic migration remains the dominant factor. The trend is projected to continue through 2026.
This consistent migration pattern supports housing demand and contributes to the positive outlook for property market growth in 2026.
What was the average annual inflation rate in Peru over the last five years, and what is the government's target for 2026?
Peru's average annual inflation rates ranged between 2.0% and 3.1% from 2020 to 2025, demonstrating relatively stable monetary conditions.
The government typically targets 2.0% inflation for 2026, reflecting prudent monetary policy focused on price stability. This target aligns with central bank objectives for sustainable economic growth.
Controlled inflation rates support real estate investment by maintaining purchasing power and reducing uncertainty about future costs. Stable inflation also supports mortgage market development.
The government's commitment to low inflation targets creates a favorable environment for long-term property investment decisions.
How many housing transactions took place in Arequipa in 2024 compared with 2020, and what is the projected number for 2026?
New home sales and housing transactions in secondary cities like Arequipa increased by 15-30% since 2020, reflecting growing market activity.
While exact transaction numbers for Arequipa aren't available, the trend shows significant growth in housing market activity. This increase reflects improved economic conditions and population growth.
Further growth in housing transactions is expected through 2026, fueled by ongoing demand from urbanization and population expansion. The market shows strong momentum.
Increased transaction volumes indicate a healthy, liquid market that benefits both buyers and sellers through better price discovery and market efficiency.
It's something we develop in our Peru property pack.
What is the expected growth rate of Arequipa's GDP between 2024 and 2026, and how does it compare to the national average?
Arequipa's GDP growth is forecast to reach 3.5-4.2% between 2025 and 2026, compared to Peru's national average of 3.1-4.0%.
Arequipa is expected to outpace or match the national average due to greater investment in infrastructure and construction. The city benefits from its strategic location and diverse economic base.
Key growth drivers include mining activities, agricultural processing, tourism, and construction sectors. Infrastructure investments are creating additional economic opportunities.
This above-average economic growth supports property market development by increasing employment opportunities and household incomes, driving housing demand.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property prices in Arequipa are positioned for moderate growth in 2026, supported by strong economic fundamentals and demographic trends.
The combination of stable rental yields, declining unemployment, and GDP growth above the national average creates a favorable environment for real estate investment.
Sources
- Peru Price Forecasts - The LatinVestor
- Peru Rental Yields - Global Property Guide
- Arequipa Real Estate Trends - The LatinVestor
- Arequipa Population - World Population Review
- Arequipa Population Trends - MacroTrends
- Peru Real Estate Analysis - Aparthotel
- Labor Market Information - INEI Peru
- Employment Growth Peru - INEI