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Peru's residential market is showing signs of stabilization in late 2025.
Property prices have remained largely flat over the past year, with national averages increasing just 0.27% while inflation-adjusted values are slightly down. Lima continues to dominate the market, particularly in premium districts like Miraflores and San Isidro, while coastal cities are experiencing growing demand from urbanization trends.
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Peru's housing market is currently stable with modest growth, as national prices averaged S/452,900 (~US$119,000) in 2025 with minimal year-over-year change.
Lima's premium districts lead pricing at $1,800-$3,500/m², while coastal cities offer better value at 30-50% lower costs, and rental yields average 5.97% nationally with strong demand from locals and growing expat interest.
| Market Indicator | Current Status (September 2025) | Trend |
|---|---|---|
| National Average Price | S/452,900 (~US$119,000) | +0.27% YoY |
| Lima Premium (Miraflores/San Isidro) | $1,800-$3,500/m² | +3% to +12% |
| Lima Modern Districts | $1,000-$1,300/m² | Stable/modest rise |
| Coastal Cities | 30-50% below Lima | Improving demand |
| National Rental Yield | 5.97% | Lima: 6.45% |
| Mortgage Rate | ~7.4% | Below historical average |
| Days on Market (Peru city) | 44 days | Up from 32 last year |
What's the current average home price across Peru and how have prices moved in the past year?
The average home price in Peru stands at approximately S/452,900 (around US$119,000) as of September 2025.
Price movement has been minimal over the past 12 months, with national averages increasing just 0.27% year-over-year. This represents nearly flat growth in nominal terms.
When adjusted for inflation, Peruvian property prices are actually slightly declining. Real prices dropped 1.7% year-over-year in Q3 2024 and showed only 0.74% growth in Q1 2025. New residential units typically range from S/300,000 to S/650,000 (US$80,000 to $175,000), depending on location and quality.
The market demonstrates stability rather than dynamic growth, with most price appreciation concentrated in Lima's premium districts while other regions remain relatively stagnant.
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How do property prices differ between Lima, coastal cities, and interior regions?
| Region | Price per m² (USD) | 2025 Trend |
|---|---|---|
| Lima Premium (Miraflores, San Isidro, Surco) | $1,800-$3,500 | +3% to +12% |
| Lima Modern Districts | $1,000-$1,300 | Stable/modest rise |
| Coastal Second Cities (Arequipa, Trujillo, Piura) | 30-50% below Lima | Improving demand |
| Interior/Mountain Regions | Substantially cheaper | Stable/flat |
| Tourist Coastal Areas | Varies significantly | Mixed performance |
What's the short-term price trend for the next 3-6 months?
Peru's residential market is expected to remain broadly stable with slight upward movement over the next 3-6 months.
Nominal price increases of 0.5% to 2% are anticipated nationally, though real inflation-adjusted values will likely remain flat to modestly negative. Lima's premium districts in Miraflores and San Isidro may see stronger gains due to continued demand from affluent locals and international buyers.
The stability stems from moderate economic growth, steady employment levels, and government housing incentives that support buyer confidence. However, inflation pressures and global economic uncertainty limit significant price appreciation.
Coastal cities like Arequipa and Trujillo may outperform the national average due to urbanization trends and infrastructure improvements. Interior regions are expected to show minimal price movement.
What's the medium-term outlook for the next 1-2 years?
The medium-term outlook for Peru's housing market appears cautiously optimistic for 2026-2027.
National GDP growth projected at 3.1% to 4% annually should support gradual price stability and modest nominal increases. Improved employment conditions, easier credit access, and continued government housing incentives will likely sustain buyer demand, particularly in Lima's modern districts and major coastal cities.
Price gains are expected to remain below inflation rates except in premium neighborhoods where international buyer interest and limited supply may drive stronger appreciation. Lima's established districts and growing coastal hubs like Arequipa and Trujillo should see the most consistent demand.
Economic stability and infrastructure development will be key factors determining whether the market transitions from stability to modest growth during this period.
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What's the long-term forecast for the next 5-10 years?
Peru's long-term real estate prospects appear promising for urban and coastal markets over the next 5-10 years.
Urban hubs including Lima, Arequipa, Trujillo, and Piura should experience gradual real price appreciation of 3% to 5% compound annually. This growth will be driven by continued urbanization, infrastructure development, and favorable demographic trends as rural populations migrate to cities.
Lima's established districts will likely maintain their premium status, while emerging coastal cities benefit from economic diversification and improved connectivity. The middle class expansion and increasing foreign investment interest should support sustained demand.
Smaller interior markets may lag significantly, remaining flat or showing minimal appreciation except in areas benefiting from new infrastructure projects or high migration flows. Property buyers should focus on urban centers with strong economic fundamentals for the best long-term returns.
How do apartment prices compare with single-family homes and luxury properties?
Apartments dominate Peru's property market, particularly in Lima where they represent the majority of transactions.
In Lima's premium areas, apartments average $1,800-$3,500 per square meter, with San Isidro commanding around $2,500/m². Single-family homes in the same prime zones typically cost slightly more per square meter but offer lower rental yields and slower resale times.
Luxury properties concentrate in San Isidro and Miraflores, with prices reaching $3,500/m² and individual homes selling for over $1.5 million. These luxury segments show price appreciation that outpaces the mass market but suffer from poor liquidity and extended marketing periods.
Apartments offer better investment characteristics with higher rental yields, faster transactions, and broader buyer appeal. Single-family homes appeal more to end-users seeking space and privacy, while luxury properties remain a niche market with higher capital requirements and risk.
What's the current rental yield and how does it compare to mortgage rates?
Peru's rental market offers attractive yields that currently exceed mortgage financing costs.
The national average gross rental yield stands at 5.97% as of Q2 2025, with Lima apartments averaging 6.45%. Top-performing Lima districts include Surquillo at 7.5%, Miraflores at 5.2%-6.7%, and San Isidro at 4.6%-5.6%.
Current mortgage rates average around 7.4% as of June 2025, which is below historical averages and creates a relatively narrow yield gap for property owners. This rate environment makes leveraged property investment more viable than in previous years.
The positive spread between rental yields and mortgage costs, particularly in high-demand areas like Surquillo and parts of Miraflores, provides cash-flow positive opportunities for investors. However, buyers should factor in property management costs, taxes, and vacancy periods when calculating net returns.
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 strong is rental demand from locals, expats, and tourists?
Rental demand in Peru comes primarily from local residents, with growing segments from expats and tourism.
Local buyers dominate the market, representing approximately 68% of Lima's new home sales, particularly in the "Social Interest Housing" segment. Middle-class and first-time buyers drive demand in Lima's middle-income districts, creating strong rental demand for affordable apartments.
Expat and international investor interest focuses heavily on Lima's premium districts including Miraflores, San Isidro, and Barranco, where lifestyle amenities and safety attract foreign residents. These areas command premium rents and maintain high occupancy rates.
Tourism rental demand, particularly through Airbnb, shows strong performance with average annual income of $8,000 per unit in Lima. Miraflores and Barranco lead tourism rental markets due to their cultural attractions, restaurants, and proximity to business districts.
The combination of stable local demand and growing international interest creates a diversified rental market with multiple income sources.
How quickly are properties selling and what's the average time on market?
Property sales velocity varies significantly between different market segments and locations across Peru.
In Peru city (not the country), the average time on market has increased to 44 days, up from 32 days in the previous year. This indicates a slight cooling in market activity, though properties still move relatively quickly compared to many international markets.
Lima's new construction inventory requires an average of 22 months to sell, which represents an improvement from the 25-month average seen between 2020-2025. This suggests gradual market strengthening in the capital's new development sector.
National sales volumes surged 25% in Lima during the first half of 2025 compared to the same period in 2024, indicating a more dynamic and liquid market. Premium properties in sought-after districts move faster than average, while luxury homes and properties in secondary locations may require extended marketing periods.
What's happening with construction and new supply development?
Peru's construction sector is experiencing steady growth that's adding new supply across key markets.
The construction sector grew 3.8% in 2025, following 4.6% growth in 2024. This expansion is driven by urbanization trends and increasing demand for eco-friendly and multi-family residential projects, particularly in Lima districts like San Miguel, Magdalena, Surquillo, and Surco.
New project pipelines are especially robust in Lima, where developers are expanding supply to meet growing demand from the expanding middle class. This increased supply is helping moderate price pressure in some market segments while providing more options for buyers.
The focus on sustainable and modern multi-family developments reflects changing buyer preferences toward amenity-rich buildings with lower maintenance requirements. Infrastructure improvements in coastal cities are also spurring new construction activity outside Lima.
This controlled supply increase supports market stability without creating oversupply conditions that could depress prices.
What budget ranges offer the best balance of affordability, demand, and resale potential?
The sweet spot for Peru property investment lies in the mid-market apartment segment in Lima's modern districts.
Metro-adjacent 2-3 bedroom apartments priced at $1,000-$1,300 per square meter in Lima's modern districts offer the best risk-adjusted returns. New units in the S/350,000-S/450,000 range provide strong rental demand, reasonable appreciation potential, and good liquidity.
This price range attracts Peru's growing middle class, ensuring steady rental demand and broader resale appeal. Properties in this segment typically feature modern amenities, good transportation access, and established neighborhood infrastructure.
Luxury properties should only be considered at steep discounts of 20% or more due to slow resale markets and higher capital risk. Budget properties below S/300,000 may offer higher yields but often lack appreciation potential and face maintenance challenges.
Buyers should avoid old buildings without proper maintenance, coastal properties within 50 meters of the shoreline, and any projects with unclear title or permit issues.
If you want to buy now, which areas and property types make the most sense?
| Investment Goal | Best Location/Property Type | Key Advantages |
|---|---|---|
| Primary Residence | Miraflores, Surco, La Molina apartments/houses | High quality, amenities, safety, schools |
| Rental Income | San Isidro, Barranco, Surquillo, Miraflores apartments | High yields (5-7.5%), strong demand |
| Medium-term Resale | Modern Lima districts, growing coastal cities | Fast turnover, price appreciation potential |
| Tourism Rental | Miraflores, Barranco furnished apartments | High Airbnb income, tourist demand |
| Value Investment | Emerging Lima districts, quality coastal cities | Lower entry cost, growth potential |
| Luxury (if discounted) | San Isidro, prime Miraflores only at 20%+ discount | Prestige, long-term appreciation (high risk) |
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.
Peru's housing market in September 2025 presents a stable investment environment with selective opportunities for informed buyers.
The combination of flat national prices, strong rental yields, and growing demand in key urban areas creates favorable conditions for strategic property investment, particularly in Lima's established districts and emerging coastal cities.
Sources
- Home Ready Global - More Peruvians Are Buying Homes in 2025
- The LatinVestor - Peru Price Forecasts
- Global Property Guide - Peru Price History
- Trading Economics - Peru Residential Property Prices
- Yahoo Finance - Peru Construction Industry Report 2025
- The LatinVestor - Lima Which Area
- Global Property Guide - Peru Rental Yields
- Home Ready Global - Housing Sales in Lima Surge in First Half of 2025