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Arequipa's property market is experiencing remarkable growth, with prices surging 9% in the past year alone.
As Peru's second-largest city continues to benefit from mining sector expansion and urban development, investors are finding attractive opportunities in both residential purchases and rental yields.
If you want to go deeper, you can check our pack of documents related to the real estate market in Peru, based on reliable facts and data, not opinions or rumors.
Arequipa's residential property market shows strong momentum with 9% annual price growth and healthy 5.99% rental yields, significantly outperforming Lima and other major Peruvian cities.
The market is driven by mining sector growth, urban migration, and constrained supply in premium districts like Cayma and Yanahuara, making it an attractive destination for both investors and residents.
| Market Metric | Current Value (September 2025) | Trend |
|---|---|---|
| Median Property Price | S/1,890,000 (USD 500,000) | +9% annually |
| Average Price per m² | S/3,480 (USD 1,000) | 33% cheaper than Lima |
| Rental Yield | 5.99% | Stable and healthy |
| New Apartments (Premium) | S/5,180/m² (USD 1,400/m²) | Fastest growth segment |
| Short-term Outlook | 9% annual growth | Strong momentum |
| Long-term Forecast | 4-5% annual growth | Sustainable expansion |
What are the latest numbers on property prices in Arequipa right now?
As of September 2025, Arequipa's property market shows strong pricing metrics that position it as an attractive alternative to Lima.
The median property price in Arequipa currently stands at S/1,890,000 (approximately USD 500,000), with an average price per square meter of S/3,480 (USD 1,000). This represents a significant 33% discount compared to Lima's property prices, making Arequipa particularly appealing for both investors and residents.
New apartments in premium districts like Cayma and Yanahuara command higher prices, with 87m² units selling for around S/451,000 (approximately S/5,180 per square meter or USD 1,400 per square meter). In Yanahuara specifically, investors can find 146m² apartments for USD 125,000 (USD 857 per square meter) and 215m² houses for USD 232,000 (USD 1,079 per square meter).
These pricing levels reflect Arequipa's position as Peru's second-largest city while maintaining affordability compared to the capital.
How have property prices in Arequipa changed over the past year?
Arequipa's residential property market has experienced exceptional growth over the past 12 months, with prices surging by approximately 9%.
This growth significantly outpaces both Peru's inflation rate of 1.65% and the nominal growth seen in major cities like Lima, which recorded 3-7% price increases during the same period. The strong performance indicates robust underlying demand and limited supply in key areas of the city.
Since 2020, Arequipa has recorded cumulative price growth of 20-30%, with the increases concentrated primarily in mid-range properties and central districts. The recovery following the pandemic has been particularly strong, driven by expansion in the mining sector and continued urban migration to the city.
It's something we develop in our Peru property pack.
What's the short-term outlook for prices in the next 6 to 12 months?
The short-term outlook for Arequipa's property market remains highly positive, with continued strong nominal growth expected at approximately 9% annually.
However, real inflation-adjusted increases could be more moderate if inflation rises above current levels. The momentum driving this growth includes ongoing mining sector expansion, infrastructure investments, and sustained urban migration to the city.
Market analysts expect the current growth trajectory to continue through the next 6-12 months, supported by limited supply in premium locations and strong local economic fundamentals. The mining boom continues to attract workers and professionals to Arequipa, maintaining pressure on housing demand.
New supply coming to market may begin to moderate some of the price pressure, but this is expected to be gradual rather than sudden.
What's the medium-term outlook for the next 2 to 3 years?
The medium-term forecast for Arequipa's property market suggests a moderation to 4-5% nominal annual growth as new supply begins to catch up with demand.
This more sustainable growth rate reflects market maturation while still outpacing inflation and providing solid returns for property owners. However, areas benefiting from major infrastructure projects could see additional boosts of 10-15% during the 2027-2028 period.
The government's continued investment in regional infrastructure, including transportation links and urban development projects, will likely support property values across different districts. Mining sector stability and Peru's overall economic growth trajectory remain key factors influencing this outlook.
Supply constraints in premium areas like Cayma and Yanahuara are expected to continue supporting price premiums in these neighborhoods.
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What's the long-term trend expected over the next 5 to 10 years?
The long-term outlook for Arequipa's property market remains positive, with sustained demand expected from population growth and economic expansion in mining and infrastructure sectors.
Continued urbanization and infrastructure improvements will likely maintain steady growth, especially in well-connected districts. The city's strategic position as Peru's second-largest urban center and gateway to southern mining regions supports this optimistic long-term view.
However, political uncertainty around the 2026 election represents a key risk factor that could temporarily dampen speculative segments or slow foreign investment. Despite this, the underlying fundamentals of population growth, economic development, and urban expansion are expected to drive property values upward over the 5-10 year horizon.
Climate considerations and sustainable development trends may also influence which areas see the strongest long-term appreciation.
Which neighborhoods in Arequipa are seeing the fastest price growth?
Cayma and Yanahuara are experiencing the fastest price appreciation in Arequipa, driven by premium new developments and high desirability among buyers seeking modern amenities.
These districts benefit from their proximity to commercial centers, quality infrastructure, and appeal to middle and upper-income families. The combination of limited land availability and strong demand has created significant upward pressure on property values.
Alto Selva Alegre represents another growth area, noted for urban renewal projects and government investment in infrastructure improvements. This district is positioned for significant property value improvement as development projects come online.
The fastest growth is concentrated in areas where new developments offer modern amenities, security features, and good connectivity to the city center and employment hubs.
Which areas are considered undervalued or more affordable right now?
Suburban sectors of Arequipa currently present the most affordable opportunities, with increased competition from new developments creating favorable conditions for buyers.
A wave of new residential projects has raised availability in these areas, leading some landlords to lower rents to attract tenants, which also affects purchase prices. These suburban areas offer good value for buyers seeking larger properties or lower entry prices.
Affordable housing segments remain stable due to robust demand from young local families and ongoing internal migration to Arequipa. Areas slightly further from the city center often provide better value while still offering access to urban amenities and employment opportunities.
It's something we develop in our Peru property pack.
How do price trends differ between apartments, houses, and land?
| Property Type | Price Trend (2024-2025) | Key Observations |
|---|---|---|
| New Apartments | +9% (Fastest Growth) | High demand in central districts, modern amenities premium |
| Modern Houses | Moderate, Steady Increase | Sought after for space and family amenities |
| Land/Plots | Rising, Slower Pace | Supply and zoning issues limit rapid growth |
| Multifamily Units | Strong Premium | Driven by housing shortage and lifestyle changes |
| Older Properties | Below Average Growth | Renovation needs reduce appreciation rate |
What are the current rental yields in different parts of Arequipa?
Arequipa's rental market offers attractive returns with an average gross rental yield of 5.99%, which represents a stable and healthy return for property investors.
The short-term rental market, particularly Airbnb properties, shows strong performance especially in downtown areas. Properties in central districts achieve median occupancy rates of 45% and average annual earnings of PEN 1,000 (approximately USD 5,000) per unit, with higher returns during tourist seasons.
Mid-range rental properties are experiencing rising rents due to demand from economic migrants and a booming local workforce. However, suburban areas may see declining rents due to oversupply of new units coming to market.
University-adjacent areas and the historic center show particularly strong rental demand from students and young professionals, supporting steady yield expectations for investors in these locations.
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 is demand for renting versus buying evolving in the city?
Homeownership trends are moving upward in Arequipa as the city's economy grows, with more families seeking to purchase rather than rent properties.
This shift is particularly driven by limited strategic land supply and increasing confidence in the local property market. Young professionals and families view property ownership as both a lifestyle upgrade and an investment opportunity.
Student and professional influx continues to boost rental demand near universities and in the historic center, creating a dual market dynamic. The growing presence of mining sector workers and their families supports both rental and purchase segments.
Short-term rental demand through platforms like Airbnb is growing sharply, attracting investor interest particularly in downtown areas where tourism and business travel intersect.
If I want to buy today, what budget ranges make the most sense for different use cases?
| Use Case | Target Budget | Property Type & Location |
|---|---|---|
| Primary Residence | S/400,000-S/650,000 (USD 100k-175k) | Mid-range apartment in Cayma/Yanahuara |
| Rental Investment | S/450,000+ for new apartments | Central or university-adjacent areas |
| Resale Investment | S/1,000,000+ for modern houses | Established growth districts |
| Airbnb Investment | S/350,000-S/600,000 | Downtown or tourist-accessible areas |
| Long-term Hold | S/500,000-S/800,000 | Infrastructure development zones |
Where and what type of property should I focus on for the best balance between short-term security and long-term growth?
Modern apartments or multifamily units in Cayma or Yanahuara offer the best balance between short-term security and long-term growth potential.
For short-term security, these properties provide stable rental yields from both long-term and short-term rental markets, with the 5.99% average yield providing steady income streams. The established infrastructure and amenities in these areas ensure consistent tenant demand.
For long-term growth, these districts show the strongest price appreciation due to infrastructure development, restricted supply, and continued urban desirability. The combination of limited land availability and ongoing development pressure supports sustained value increases.
Secondary options include undervalued units in Alto Selva Alegre for value growth potential, or affordable suburban properties for investors seeking lower entry prices while maintaining steady tenant demand. It's something we develop in our Peru property pack.
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.
Arequipa's property market demonstrates exceptional strength with 9% annual growth and healthy 5.99% rental yields, significantly outperforming other major Peruvian cities.
The combination of mining sector growth, urban migration, and constrained supply in premium districts creates compelling opportunities for both investors seeking rental income and capital appreciation.
Sources
- The LatinVestor - Arequipa Price Forecasts
- The LatinVestor - Arequipa Real Estate Trends
- Global Property Guide - Peru Rental Yields
- Properstar - Arequipa House Prices
- The LatinVestor - Peru Real Estate Trends
- Airbtics - Airbnb Revenue Arequipa
- Global Property Guide - Peru Price History
- The LatinVestor - Arequipa Real Estate Forecasts