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Yes, the analysis of Lima's property market is included in our pack
Lima's property market has shown remarkable resilience and growth potential, making it an attractive destination for both investors and residents. Lima's housing prices have doubled in most districts between 2015 and 2025, with experts forecasting continued moderate growth driven by population expansion, infrastructure development, and economic stability.
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.
Lima's property market experienced an average 10% price increase in 2024-2025, with forecasts suggesting 3-7% annual growth over the next five years.
Population growth of 1.4% annually and major infrastructure projects including Metro expansion are expected to sustain housing demand through 2035.
| Time Period | Expected Annual Price Growth | Key Drivers |
|---|---|---|
| 2025-2030 (Short-term) | 3-7% | Population growth, Metro Lines 2 & 4 expansion |
| 2030-2035 (Medium-term) | 4-5% | Infrastructure completion, economic stability |
| 2035-2045 (Long-term) | 3-4% | Urbanization, middle class expansion |
| Current Rental Yields | 5.9-6.5% | Varies by district and property type |
| Population Growth | 1.4% annually | Urban migration and natural growth |
| New Housing Supply | 7,000-8,000 units/year | Current construction rate in 2025 |
| Interest Rate Outlook | Trending toward 4% | Expected by 2026 |
What has been the annual percentage change in house prices in Lima over the past 10 years?
Lima's residential property market has demonstrated strong growth momentum over the past decade, with prices doubling in most districts between 2015 and 2025.
The annual price growth has averaged approximately 5% from 2020 to 2025, with significant acceleration in recent years. In the most recent period from 2024 to 2025, Lima experienced an impressive 10% average annual increase in house prices.
Certain districts have outperformed the market average, with areas like Chorrillos and Lince experiencing even higher gains during the 2024-2025 period. The growth has been driven by urban migration patterns, infrastructure expansion projects, and strong underlying demand from both local and international buyers.
This robust performance reflects Lima's position as Peru's economic center and the ongoing urbanization trends that continue to fuel housing demand. The consistent price appreciation over this decade establishes Lima as one of the more stable and attractive property markets in Latin America.
What are the official forecasts for Lima's housing price growth over the next 5, 10, and 20 years?
Official forecasts indicate continued but more moderate growth for Lima's housing market across all time horizons, reflecting market maturation and economic stability.
For the next five years (2025-2030), experts predict annual price growth of 3-7%, though real inflation-adjusted returns may be more modest given expected inflation rates. This represents a normalization from the exceptional 10% growth experienced in 2024-2025.
Medium-term forecasts for the next 10 years project steady appreciation of around 4-5% annually, assuming continued political stability and sustained infrastructure investment. This growth rate reflects a balanced market with adequate supply meeting growing demand.
Long-term projections for the next 20 years, while more speculative, suggest moderate but sustained appreciation driven by ongoing urbanization and an expanding middle class. Experts expect particularly strong performance in well-connected districts that benefit from infrastructure improvements.
It's something we develop in our Peru property pack.
How is Lima's population expected to grow or shrink in the coming decades, and how will that affect housing demand?
Lima's population dynamics present a compelling case for sustained housing demand, with the metropolitan area currently housing 11.5 million residents as of 2025.
The city continues to experience steady population growth at approximately 1.4% annually, driven by both natural population increase and continued urban migration from rural areas. This growth rate has remained consistent over recent years, indicating stable demographic trends.
Population projections indicate that Lima will add over 1 million new residents by 2030, representing significant additional housing demand. This demographic momentum ensures continued pressure on the housing market, particularly in the affordable and mid-range segments.
The combination of urban migration and natural growth creates a diverse demand profile, with young families seeking starter homes and established residents looking to upgrade. This demographic expansion directly translates to increased housing demand across all market segments, supporting price stability and growth potential.
What is the projected supply of new housing units in Lima over the next 10 years?
Lima faces a substantial housing supply deficit that continues to support price growth, with current construction levels falling short of demographic demand.
As of 2025, new housing supply reaches approximately 7,000-8,000 units per year, representing a 7-8% increase from 2024 construction levels. However, this supply rate remains insufficient to meet the growing population's needs.
Long-term national housing plans project the construction of 1.1 million new units over 20 years across Peru, averaging approximately 55,000 units annually nationwide. Lima's share of this construction is expected to be substantial, though exact allocations may vary based on policy priorities and market demand.
The persistent supply-demand imbalance, with current supply rates well below demographic requirements, creates a supportive environment for continued price appreciation. Government initiatives aim to increase construction rates, but implementation timelines suggest the supply deficit will persist for several years.
How are interest rates and mortgage lending policies expected to change in Peru in the long term?
Peru's monetary policy environment is expected to remain supportive of real estate investment, with interest rates stabilizing at attractive levels for property buyers.
| Interest Rate Type | Current Level (2025) | 2026 Projection |
|---|---|---|
| Policy Interest Rate | 4.5% | Trending toward 4.0% |
| Long-term Government Bonds | 6.0-6.4% | Stable to slightly lower |
| Mortgage Credit Availability | Expanding | Continued expansion |
| Government Housing Programs | Fondo MiVivienda, Techo Propio | Enhanced with green incentives |
| Target Borrower Segments | Low to middle income | Expanded middle class focus |
| Green Housing Incentives | Limited | Significant expansion |
| Foreign Buyer Access | Good | Improved through 2027 |
Gradual mortgage credit expansion continues, particularly targeting lower and middle-income buyers through enhanced government programs including Fondo MiVivienda and Techo Propio. New incentives for sustainable "green" housing are expected to further stimulate lending activity.
What is the expected inflation rate in Peru over the next decade, and how might it influence property prices?
Peru's inflation outlook remains well-anchored within the central bank's target range, creating a stable environment for real estate investment planning.
The central bank targets inflation of 1-3% annually, with consensus forecasts predicting approximately 2.5-2.8% for 2025-2027 and stable expectations for subsequent years. This controlled inflation environment supports the central bank's credibility and monetary policy effectiveness.
Modest inflation rates support real estate as a store of value, providing natural hedge against currency depreciation. With inflation expectations well-anchored, real housing price growth should track nominal gains minus the inflation rate, suggesting real annual growth of 2-3%.
The stable inflation environment also supports consumer confidence and long-term financial planning, encouraging both local and foreign investment in Lima's property market. This predictable macroeconomic backdrop enhances the attractiveness of real estate as a long-term investment vehicle.
What is the forecast for Peru's GDP growth, and how could it impact household incomes and housing affordability in Lima?
Peru's economic growth prospects remain positive, supporting increased housing affordability and demand in Lima's residential market.
GDP growth projections range between 2.5-3.1% annually through 2026, with potential upside if commodity prices and investment levels remain favorable. This steady economic expansion supports employment growth and rising household incomes.
Rising GDP growth and an expanding middle class underpin greater housing affordability over the long term, provided income growth outpaces house price appreciation. The correlation between economic growth and housing demand remains strong in emerging markets like Peru.
Economic diversification efforts and infrastructure investment support sustained growth beyond the traditional mining sector, creating more stable employment opportunities in Lima. This economic foundation provides the income growth necessary to support continued housing demand and price appreciation.
How are government housing policies or regulations likely to change in the next 5–10 years?
Government housing policies are evolving toward greater support for affordable housing and sustainable development, creating favorable conditions for market expansion.
The National Housing and Urban Development Policy for 2030 aims to significantly increase affordable housing supply while boosting access for low and middle-income households. The policy emphasizes sustainable urban development and improved housing quality standards.
Recent and upcoming regulatory changes focus on enhanced mortgage subsidies, new social housing incentives, and improved public land management for housing development. Eco-sustainable building requirements are becoming more prominent in government housing programs.
Stronger targeting of subsidies for vulnerable groups and first-time buyers is expected to expand market participation, while simplified procedures for development approvals should increase housing supply. These policy changes generally support market growth and accessibility.
It's something we develop in our Peru property pack.
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What major infrastructure or development projects are planned in Lima that could influence property values?
Lima's ambitious infrastructure development program is set to transform the city's connectivity and property value landscape over the next decade.
The expansion of Lima Metro, particularly Lines 2 and 4, represents the most significant infrastructure investment affecting property values. These new metro lines will connect key districts and are expected to increase property values by 15-25% within 500 meters of new stations.
The expansion of Jorge Chávez International Airport, combined with new industrial parks in Ancon and Lurin, will create new employment centers and residential demand zones. These projects are part of the comprehensive Lima 2035 Plan for metropolitan development.
Highway improvements and enhanced public transport networks will open previously less accessible districts to development, likely creating new affordable housing zones with strong appreciation potential. The integrated approach to infrastructure development ensures sustained positive impact on property values across multiple districts.
How might foreign investment trends in Peruvian real estate evolve in the coming years?
Foreign investment in Peruvian real estate is positioned for significant growth, supported by favorable legislative reforms and market accessibility improvements.
The "Impulso PerĂş" initiative offers legal and tax stability agreements, tax exemptions, and simplified procedures for international buyers through 2027. These reforms specifically target foreign real estate investment and are expected to generate substantial international interest.
FIBRA Prime and other real estate investment vehicles are catalyzing cross-border capital flows, providing institutional pathways for foreign investment. These professionally managed investment products reduce barriers for international investors seeking exposure to Lima's property market.
Further infrastructure developments and economic stability are expected to make the market increasingly attractive to foreign buyers, particularly from neighboring countries and North America. The combination of attractive yields, growth potential, and improved accessibility creates compelling investment opportunities for international investors.
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.
What are experts predicting about rental yields in Lima for the next decade?
Lima's rental market offers attractive yields that are expected to remain competitive throughout the next decade, though with some moderation from current levels.
Current rental yields in Lima range from 5.9-6.5% gross average, with significant variation by district and property type. Smaller apartments and properties in modern districts like Surquillo achieve yields as high as 7.5%, while premium areas like Miraflores typically yield 5-5.6%.
Slight downward pressure on yields is forecast as price appreciation outpaces rental growth in core districts, but returns will remain competitive by regional standards. The yield compression reflects market maturation rather than fundamental weakness.
The rental market benefits from continued population growth, young demographic profile, and increasing mobility preferences among millennials. These factors support sustained rental demand and stable yield performance across the investment horizon.
It's something we develop in our Peru property pack.
What risks or potential shocks could cause Lima's housing prices to fall significantly in the long run?
While Lima's housing market fundamentals remain strong, several potential risks could cause significant price corrections if they materialize.
Political instability represents the primary risk, particularly major regulatory changes that could affect property rights, taxation, or foreign investment policies. Peru's history of political volatility requires careful monitoring by real estate investors.
Economic risks include global economic downturns, commodity price collapses affecting Peru's export economy, or abrupt tightening of mortgage credit availability. Rising interest rates beyond current projections could significantly impact affordability and demand.
Market-specific risks include oversupply in select segments due to poorly targeted construction booms, prolonged stagnation in wage growth leading to affordability gaps, or environmental and climate shocks affecting low-lying or informal settlements.
While current fundamentals support continued growth, significant shocks to demand, global capital flows, or credit access could trigger downward corrections of 20-30% in vulnerable market segments. Diversification and careful market selection remain important risk management strategies.
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.
Lima's property market presents compelling long-term opportunities driven by solid demographic fundamentals, infrastructure development, and economic stability.
Investors should focus on well-connected districts benefiting from metro expansion while remaining aware of political and economic risks that could impact market performance.
Sources
- The LatinVestor - Lima Price Forecasts
- CEIC Data - Average House Price Lima Metropolitan
- The LatinVestor - Peru Price Forecasts
- MacroTrends - Lima Population
- World Population Review - Lima
- FYNSA - Peru Real Estate Market Expansion
- BBVA Research - Real Estate Peru
- Trading Economics - Peru Interest Rate
- Focus Economics - Peru Interest Rate
- CEIC Data - Peru Long Term Interest Rate