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As of September 2025, the average house price in Arequipa stands at around S/3,480 per square meter (approximately USD 1,000 per m²), making it one of Peru's most dynamic property markets.
The Arequipa real estate market has experienced significant growth over the past year, with prices rising by 9% compared to 2024, driven by strong demand from professionals and foreign investors attracted to the city's improving infrastructure and economic opportunities.
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Arequipa's property market offers excellent value compared to Lima, with central apartments averaging S/8,256 per m² and suburban areas at S/5,500 per m².
The city presents strong investment opportunities with rental yields ranging from 2.5% to 6%, particularly in central districts like Cayma and Yanahuara.
| Property Type | Average Price (S/) | Price per m² (S/) |
|---|---|---|
| Central Apartment (1-bed) | 700,000 - 1,200,000 | 8,256 |
| Central Apartment (3-bed) | 1,800,000 - 2,000,000 | 8,256 |
| Mid-range Apartment (Cayma) | 451,000 | 5,180 |
| Suburban House | 400,000 - 800,000 | 3,000 - 4,500 |
| Luxury Property | 1,890,000+ | 9,000+ |
| Budget Home (Yura/Paucarpata) | 280,000 - 450,000 | 2,500 - 3,500 |
| New Development (Premium) | 600,000 - 1,500,000 | 6,500 - 8,000 |
What are the current average house prices in Arequipa?
As of September 2025, the average residential property price in Arequipa is S/3,480 per square meter, which equals approximately USD 1,000 per square meter.
The median sale price for properties in Arequipa commonly reaches S/1,890,000, reflecting the city's position as Peru's second-largest urban center. Central apartments command significantly higher prices, averaging S/766.87 per square foot (approximately S/8,256 per square meter or USD 2,273 per square meter).
Properties outside the city center are more affordable, with apartments averaging S/510.96 per square foot (approximately S/5,500 per square meter or USD 1,515 per square meter). This price differential between central and suburban areas creates opportunities for both luxury buyers and budget-conscious investors.
The Arequipa property market has experienced a 9% price surge over the last 12 months, driven by strong demand and limited supply, particularly in sought-after central districts.
How do prices vary by neighborhood and district?
Property prices in Arequipa show significant variation depending on the specific district and neighborhood characteristics.
The most expensive areas include Cayma, Yanahuara, and central districts, where new developments and strong demand from professionals and foreign buyers drive premium pricing. These districts benefit from superior infrastructure, proximity to business centers, and modern amenities.
Up-and-coming neighborhoods like Alto Selva Alegre are experiencing increased investor interest due to infrastructure improvements and urban renewal projects. These areas offer potential for capital appreciation as development continues.
Budget-friendly options can be found in outlying districts and older suburban areas, where oversupply of rental units has created downward pressure on prices. Areas like Yura, Paucarpata, and northern districts offer more affordable entry points into the Arequipa property market.
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What's the difference between apartments, houses, and luxury properties?
| Property Type | Typical Price Range (S/) | Key Characteristics |
|---|---|---|
| Mid-range Apartment | 451,000 (87m²) | New builds in Cayma/Yanahuara, S/5,180/m² |
| Traditional House | 500,000 - 1,500,000 | Older suburbs, more space, slower appreciation |
| Luxury Property | 1,890,000+ | Center locations, exclusive districts, new penthouses |
| Budget Apartment | 280,000 - 450,000 | Outlying areas, basic amenities |
| Premium Condo | 800,000 - 1,200,000 | Modern amenities, central location |
| Villa/Estate | 2,000,000+ | Large lots, premium finishes, exclusive areas |
| Investment Unit | 350,000 - 600,000 | Rental-optimized, good yields |
How do prices change based on property size?
Property pricing in Arequipa follows a clear pattern where per-square-meter costs are highest for smaller, centrally located apartments and decrease for larger suburban properties.
Small central apartments command premium per-square-meter pricing due to high demand and limited supply. A typical example is an 87-square-meter apartment in prime districts selling for S/451,000, resulting in S/5,180 per square meter.
Larger suburban homes offer better value per square meter but may have slower appreciation rates. Properties ranging from 120 to 200 square meters in older suburban areas typically cost between S/3,000 to S/4,500 per square meter.
This pricing structure reflects market dynamics where convenience and location command premium pricing, while size and space are more affordable in outlying areas. Buyers seeking maximum living space should consider suburban options, while those prioritizing location and investment potential should focus on central smaller units.
What's the total cost including fees, taxes, and closing costs?
When purchasing property in Arequipa, buyers must budget for additional costs beyond the purchase price, totaling approximately 4.5% to 6% of the property value.
The mandatory transfer tax applies to all transactions at 3% of the purchase price. For new construction properties, an additional 18% VAT applies to the construction value, making new builds more expensive in total cost.
Professional fees include notary fees ranging from 0.3% to 1% of the purchase price, registration fees of 0.3% to 1%, and legal fees typically between 0.5% to 1%. Optional costs include property appraisals ranging from USD 200 to USD 500.
Financing-related costs and agent commissions (typically 3% to 5%, usually paid by the seller) may also apply depending on the transaction structure. Buyers should budget approximately S/25,000 to S/35,000 in additional costs for a S/500,000 property purchase.
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What would a typical mortgage look like?
Mortgage financing in Arequipa is available for both local and foreign buyers, though conditions vary significantly based on residency status and income documentation.
As of September 2025, fixed mortgage interest rates range from 6.95% to 7.44%, with some lenders offering rates up to 15% depending on risk assessment. Foreign buyers typically face stricter requirements including 20% to 30% down payments and shorter loan terms of 15 to 20 years.
For a typical S/500,000 property purchase with a 25% down payment (S/125,000), a borrower would finance S/375,000. At a 7.44% interest rate over 20 years, the monthly payment would be approximately S/3,022.
Foreign buyers must demonstrate Peruvian bank account history and provide proof of local income or corporate backing. Loan approval processes typically take 30 to 60 days, and borrowers should factor in additional mortgage-related fees during the closing process.
Can you provide specific property purchase examples?
Real property listings in Arequipa demonstrate the range of options available across different price points and property types.
Budget options include houses in Yura starting around USD 75,000 (approximately S/280,000), offering basic amenities and older construction. Mid-range properties in established neighborhoods range from USD 120,000 to USD 122,000 (S/450,000 to S/460,000) for 3 to 4 bedroom homes.
Central apartments show higher pricing, with 1-bedroom units ranging from S/700,000 to S/1,200,000, while 3-bedroom central apartments typically cost between S/1,800,000 to S/2,000,000. New luxury condominiums in Yanahuara and Cayma, such as 87-square-meter units, sell for around S/451,000.
Luxury properties exceed S/2,000,000, featuring premium finishes, prime locations, and exclusive amenities. These properties attract high-net-worth individuals and foreign investors seeking luxury lifestyle options in Arequipa.
Which areas offer the best value and investment potential?
1. **Most Expensive Districts**: Cayma, Yanahuara, and City Center command premium prices due to established infrastructure, business proximity, and high-end developments attracting professionals and foreign buyers.2. **Up-and-Coming Areas**: Alto Selva Alegre presents excellent investment potential with ongoing urban renewal projects and infrastructure improvements creating future appreciation opportunities.3. **Budget-Friendly Options**: Eastern and outlying districts including Yura, Paucarpata, and northern areas offer affordable entry points with potential for long-term growth as the city expands.4. **Investment Hotspots**: Central districts near universities and business centers provide strong rental demand from students and young professionals.5. **Luxury Markets**: Exclusive neighborhoods in Cayma and Yanahuara attract foreign investment due to favorable exchange rates and premium lifestyle amenities.
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What are the smartest buying strategies for different purposes?
Property purchase strategies in Arequipa should align with your specific goals, whether for personal residence, rental income, or capital appreciation.
For owner-occupiers seeking stability, newer or thoroughly renovated units in central and upper districts provide quality of life benefits and consistent property values. These properties offer better access to amenities, services, and infrastructure while maintaining strong resale potential.
Rental investment strategies should prioritize central apartments for short-term rentals like Airbnb, university area units for student housing, or properties appealing to young professionals. Focus on flexible layouts, modern amenities, and locations with strong transportation links.
Resale-focused investors should target mid-range properties in up-and-coming neighborhoods where urban improvements haven't been fully reflected in pricing. Avoid oversupplied new suburban developments that may face competition and slower appreciation.
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How do short-term and long-term rental returns compare?
Rental yield analysis in Arequipa reveals significant differences between short-term and long-term rental strategies, with location and property type being crucial factors.
Long-term rental yields typically range from 2.5% to 6%, averaging around 5.99% across the market. These yields remain more stable in affordable and mid-range property segments, providing predictable income streams for investors.
Short-term rental properties, particularly those suitable for Airbnb, can generate approximately S/1,000 to S/1,350 per month (USD 318 to USD 424), often doubling equivalent long-term rental income when achieving high occupancy rates in central or tourist-friendly areas.
Short-term rentals require more active management, seasonal demand fluctuations, and higher operational costs, but offer significantly higher potential returns in prime locations. Properties in central districts or near tourist attractions perform best for short-term rental strategies.
What are the price trends and future forecasts?
Arequipa's property market has demonstrated strong recent performance with continued growth expected in the medium term.
Over the past year, property prices increased by 9% from 2024 to 2025, significantly outpacing Peru's general inflation rate. This growth reflects strong demand fundamentals and limited supply in desirable areas.
Looking back five years, the market showed moderate growth prior to 2020, followed by the recent surge. Future projections suggest annual nominal growth of 4% to 5% from 2026 to 2030, with higher appreciation expected in well-connected districts benefiting from infrastructure improvements.
Ten-year forecasts remain positive, contingent on continued political and economic stability in Peru. Well-located properties in established districts are expected to maintain steady appreciation, while emerging neighborhoods may see higher volatility but greater potential returns.
How does Arequipa compare to other major cities?
| City | Average Price per m² (USD) | 2024-25 Price Change |
|---|---|---|
| Lima | 1,500 | 3-7% |
| Arequipa | 1,000 | 4.5-9% |
| Cusco | 1,200 | 3.8% |
| Trujillo | 950 | 5.5% |
| Tarapoto | 800 | 6% |
| Chiclayo | 850 | 4.2% |
| Piura | 750 | 5.8% |
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 real estate market offers compelling opportunities for both investors and residents, with property prices remaining competitive compared to Lima while delivering strong appreciation potential.
The combination of growing foreign interest, infrastructure development, and favorable rental yields positions Arequipa as an attractive destination for property investment in Peru's evolving real estate landscape.
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