Authored by the expert who managed and guided the team behind the Peru Property Pack
Everything you need to know before buying real estate is included in our Dominican Republic Property Pack
Arequipa's rental market shows strong yields of 5.49-5.99% for most property types, with 1-bedroom apartments averaging S/566-867 monthly depending on location.
The city's rental prices vary significantly by district, with premium areas like Cayma and Yanahuara commanding higher rents, while short-term rentals can generate double the returns of traditional long-term leases. As of September 2025, the market continues growing with steady demand from students, professionals, and tourists.
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 offers competitive rental yields of 5.49-5.99%, with apartments averaging S/77/m²/month and houses at S/35/m²/month.
Premium districts like Cayma and Yanahuara command 30-50% higher rents than outer areas, while short-term rentals can achieve occupancy rates up to 78% in prime locations.
| Property Type | Average Monthly Rent | Rental Yield | Best Districts |
|---|---|---|---|
| 1-bedroom apartment (center) | S/867 | 5.5-6% | Cercado, Vallecito |
| 1-bedroom apartment (outside) | S/567 | 5.8-6.2% | Cerro Colorado, José Luis Bustamante |
| 2-bedroom apartment | S/560 | 5.4-5.9% | Cayma, Yanahuara |
| 3-bedroom apartment | S/730 | 5.2-5.7% | Cayma, Miraflores |
| Studio (city center) | S/1,110-2,220 | 6-7% | Cercado, Vallecito |
| House (3-bedroom) | S/4,350 | 5.3-5.8% | Cayma, Yanahuara |
| Short-term rental | $224-309/month | 8-12% | All premium districts |
What's the current average rent in Arequipa by property type?
The Arequipa rental market shows distinct pricing patterns across different property types as of September 2025.
For apartments, 1-bedroom units in the city center average S/867 per month, ranging from S/700 to S/1,200. Outside the center, these same apartments drop to S/567 monthly, typically between S/500-600. Larger apartments follow a different pattern, with 2-bedroom units averaging S/560 across all locations and 3-bedroom apartments at S/730 monthly.
Houses command significantly higher rents, with a median monthly cost of S/7,310. The average price per square meter for houses sits at S/35, making a typical 3-bedroom, 200m² house in Cayma cost around S/4,350 per month. Studios in the city center range from $300-600 monthly (approximately S/1,110-2,220), making them attractive options for single professionals or students.
These prices reflect the city's growing demand from students, professionals, and expatriates who value Arequipa's climate and proximity to major universities and business districts.
How do rental prices change across different districts in Arequipa?
District location dramatically impacts rental costs in Arequipa, with premium areas commanding 30-50% higher rents than average neighborhoods.
Premium districts like Cayma, Yanahuara, and Vallecito charge the highest rents due to superior amenities, proximity to parks, enhanced security, and better infrastructure. These areas attract expatriates and affluent locals willing to pay premium prices for quality living conditions. Cercado (the historic center) also maintains higher rental rates due to its central location and cultural significance.
For short-term rentals, the district performance varies significantly. Arequipa center generates $309 monthly revenue with a $41 daily rate and 36% occupancy. Yanahuara produces $246 monthly at $31 daily with similar occupancy. Cayma achieves $288 monthly revenue with $37 daily rates and slightly higher 38% occupancy. Miraflores shows the highest occupancy at 46% but lower daily rates of $24, resulting in $224 monthly revenue.
Outer districts like Cerro Colorado and José Luis Bustamante y Rivero offer more affordable options, typically 20-40% below premium district rates, making them popular with families and budget-conscious renters.
What's the average rent per square meter in Arequipa?
Arequipa's rental market shows clear price differentiation per square meter based on property type and location.
Apartments average S/77 per square meter monthly, with some listings reaching S/105/m²/month in premium locations. This higher range typically applies to newer constructions or properties in sought-after districts like Cayma and Yanahuara. Houses offer better value at S/35 per square meter monthly, making them attractive for families needing more space.
The general market average sits around S/56/m²/month when combining all property types. Premium districts can push these rates 25-40% higher, while outer areas may offer 15-30% discounts from the city average. Property age, condition, and specific amenities like parking, security, or modern appliances can add S/10-20/m²/month to base rates.
It's something we develop in our Peru property pack.
What's the total rental cost including all fees and taxes?
Beyond base rent, tenants in Arequipa face additional costs that typically add 25-35% to monthly housing expenses.
| Cost Component | Monthly Amount | Annual Impact |
|---|---|---|
| Base rent (2-bedroom apt) | S/560 | S/6,720 |
| Maintenance fees | S/140-280 (S/6-10/m²) | S/1,680-3,360 |
| Property taxes | S/47-67 (0.7-1% annually) | S/560-800 |
| Agency fees (one-time) | S/560 (1 month) | S/560 |
| Legal/documentation | S/50-100 | S/600-1,200 |
| Total monthly cost | S/747-947 | S/8,960-11,640 |
| Additional cost vs rent | 33-69% | 33-73% |
Maintenance fees in Arequipa run about 20-30% lower than Lima averages, typically S/6-10 per square meter monthly. Property taxes vary based on cadastral value, generally 0.7-1% annually. Leasing contracts involve agency fees around one month's rent plus minor legal and documentation costs.
How do mortgage payments compare to rental costs?
Buying versus renting in Arequipa strongly favors renting in the current market conditions.
Mortgage interest rates range from 7.4-15% depending on the bank, currency choice, and residency status. For a typical 2-bedroom apartment valued at S/118,690, monthly mortgage payments would reach S/1,350-1,500, significantly higher than the S/560 average rent for similar properties. This represents a 140-170% premium for ownership versus renting.
Purchase prices average S/3,480 per square meter, while rents only cost S/77/m²/month. At current rates, the rent-to-purchase ratio strongly favors renters, with ownership costs nearly triple rental expenses. High interest rates and limited financing options for foreigners make renting more attractive for most investors and residents.
The math changes only for cash buyers or those accessing preferential lending rates, but even then, rental yields of 5.49-5.99% suggest purchase prices remain elevated relative to rental income potential.
Don't lose money on your property in Arequipa
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What investment returns can investors expect from Arequipa rentals?
Arequipa delivers some of Peru's strongest rental yields, making it attractive for property investors.
Gross rental yields average 5.49-5.99% for apartments and houses, significantly above Lima's 4.5-6.45% range. Short-term rentals generate substantially higher returns, often doubling long-term rental income in central districts. Top-performing Airbnb properties achieve occupancy rates up to 78%, while average properties maintain 36-45% occupancy.
The yield advantage comes from Arequipa's lower purchase prices relative to rental income compared to Lima or other major Peruvian cities. Properties in premium districts like Cayma and Yanahuara consistently deliver yields above 5.5%, while outer areas can reach 6%+ due to lower acquisition costs.
Short-term rental investors targeting tourists and business travelers see the strongest returns, particularly during peak tourism seasons and university enrollment periods. The mining industry's presence also creates steady demand from rotating professional workers.
How have rents and yields changed over recent years?
Arequipa's rental market shows steady growth with resilient yields despite rising property prices.
Over the past five years, rents increased 12-18% while yields remained stable at 5.4-6%. This stability occurred because property purchase prices rose proportionally with rental income, maintaining investor returns. The modest yield decrease reflects higher purchase prices rather than declining rental demand.
From 2024 to 2025, rents rose 3-9% while property prices increased 9%. Yields remained unchanged or dropped slightly as purchase price appreciation outpaced rental growth. However, the rental market continues tightening due to steady population growth and limited new construction in prime areas.
The trend indicates healthy rental demand supporting price growth, though investors should monitor purchase price appreciation to ensure yield sustainability. Arequipa's economic diversity through mining, tourism, and education helps maintain rental income stability.
What are the rental market forecasts for the next decade?
Arequipa's rental market outlook remains positive with continued growth expected across multiple timeframes.
For 2026, rents are forecast to rise 3-5% with yields remaining flat to slightly positive as demand continues exceeding supply. Limited new construction in desirable areas supports upward rent pressure, while economic growth from mining activities provides tenant income stability.
The five-year outlook shows continued rental appreciation driven by 15% expected population growth and ongoing urbanization. Yields may strengthen if supply constraints persist, particularly in premium districts where development faces regulatory hurdles. University expansion and mining sector growth support long-term rental demand.
Over the ten-year horizon, urbanization trends favor continued rental growth, though government housing projects may moderate rent increases in some segments. Yields should remain above Lima levels if the mining economy persists and attracts continued professional migration. Climate advantages over coastal cities may drive additional long-term demand.
It's something we develop in our Peru property pack.
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 do vacancy rates vary across Arequipa's rental market?
Vacancy rates in Arequipa show significant variation by property type, location, and price segment.
Short-term rentals maintain occupancy rates averaging 36% city-wide, with top-performing properties reaching 78% in prime locations. Median Airbnb occupancy sits around 45%, indicating healthy tourist and business traveler demand. Entry-level short-term rentals struggle more with only 16% occupancy, while premium properties consistently achieve higher rates.
Long-term rental vacancy remains low in central districts at under 10%, reflecting strong demand from students, professionals, and families. Luxury houses and suburban properties face higher vacancy rates of 15-20% due to limited target demographics and higher rental costs. Mid-range apartments in established neighborhoods maintain the lowest vacancy rates.
Premium districts like Cayma and Yanahuara show consistently lower vacancy across all property types due to their desirable locations and amenities. The university calendar significantly impacts vacancy patterns, with higher turnover during academic year transitions but generally stable occupancy during active periods.
Who are the typical renters in Arequipa's market?
Arequipa's rental market serves diverse tenant profiles, each with distinct preferences and requirements.
1. **Students** represent a major segment, preferring studios and 1-bedroom apartments near universities in Cercado and Vallecito districts. They typically seek affordable options with good transportation links to campus areas.2. **Expatriates** gravitate toward Cayma, Yanahuara, and Vallecito for enhanced security, modern amenities, and international community presence. They often prioritize safety and convenience over cost considerations.3. **Local families** favor 2-3 bedroom apartments or small houses in residential districts like Cayma and Cerro Colorado, seeking good schools, parks, and family-friendly environments.4. **Mining and business professionals** often prefer modern apartments in central or business districts, with many choosing short-term leasing arrangements due to rotating work assignments.5. **Tourism-related renters** primarily use short-term accommodations, creating demand for furnished properties in historic and scenic areas with easy access to attractions and transportation hubs.Each segment influences different market dynamics, with students driving demand during academic years, expatriates seeking premium properties year-round, and professionals creating steady demand for flexible lease terms.
What property types work best for short-term versus long-term rentals?
Investment strategy in Arequipa should align property type with rental approach for optimal returns.
For short-term rentals (Airbnb), 1-2 bedroom apartments in Arequipa center, Cayma, Yanahuara, and Miraflores perform best. These properties achieve high occupancy rates, strong average daily rates, and steady demand from tourists and business travelers. Modern amenities, WiFi, and proximity to attractions are essential for short-term success.
Long-term rentals favor 2-3 bedroom apartments in family-oriented districts and affordable houses in areas like Cayma and Cerro Colorado. These properties provide stable tenancy with lower vacancy rates and consistent rental income. Families and long-term residents prioritize space, parking, and neighborhood amenities over luxury finishes.
Short-term rentals require higher initial investment for furnishing and ongoing management but generate approximately double the income of long-term rentals. Long-term properties offer more predictable cash flow with lower management intensity, making them suitable for passive investors seeking steady returns.
It's something we develop in our Peru property pack.
How does Arequipa compare to other major Peruvian cities?
Arequipa positions favorably among Peru's major rental markets, offering competitive yields and growth potential.
| City | Average Yield | 3-bed Rent | Price/m² (buy) | STR Vacancy |
|---|---|---|---|---|
| Arequipa | 5.49-5.99% | S/730-1,900 | S/3,480 | 36-45% |
| Lima | 4.5-6.45% | S/1,300-2,200 | S/5,700-7,900 | 28-40% |
| Trujillo | 6.18% | S/900-1,400 | S/2,800 | ~33% |
| Cusco | ~6.5% | S/1,100-1,800 | S/3,100 | 42% |
Arequipa offers above-average yields compared to Lima while maintaining lower purchase prices than the capital. The city provides stronger returns than Lima's premium markets without the extreme seasonal volatility seen in tourist-dependent Cusco. Trujillo shows slightly higher yields but with less market depth and fewer investment options.
The combination of steady demand from diverse sources (students, mining, tourism), reasonable purchase prices, and growing rental rates makes Arequipa attractive for both domestic and international investors seeking balance between returns and market stability.
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 rental market offers compelling opportunities for investors seeking strong yields and steady growth in Peru's second-largest city.
With yields of 5.49-5.99% and diverse tenant demand from students, professionals, and tourists, the market provides both stability and growth potential for long-term and short-term rental strategies.