Authored by the expert who managed and guided the team behind the Peru Property Pack
Yes, the analysis of Lima's property market is included in our pack
Lima's residential property market is experiencing steady growth with strong fundamentals driving demand in 2025. The city faces a severe housing shortage of 1.9 million homes while adding 37,000 new households annually, creating upward pressure on prices across all districts.
Property prices in Lima's prime districts have risen by an average of 5% annually over the past decade, with central areas like Miraflores and San Isidro seeing increases up to 12% in peak periods. Current mortgage rates at 7.44% and projected inflation of 2-3% suggest nominal price growth of 3-7% will continue through 2026.
If you want to go deeper, you can check our pack of documents related to the real estate market in Lima, based on reliable facts and data, not opinions or rumors.
Lima's property market shows strong upward momentum driven by severe housing shortage and consistent household formation.
Prime districts command $1,800-2,500 per square meter while outer areas trade at $700-950, with all segments expected to appreciate 3-7% annually through 2026.
| Market Factor | Current Status | 2026 Outlook |
|---|---|---|
| Average Price Growth | 5% annually (past decade) | 3-7% expected |
| Housing Shortage | 1.9 million units | Persisting demand pressure |
| New Households | 37,000 annually | Continued formation |
| Mortgage Rates | 7.44% (June 2025) | Stable around 7-8% |
| Rental Yields | 4.6-6.7% (prime districts) | Gradual compression expected |
| Days on Market | Decreasing (weeks not months) | Tight inventory continues |
| Foreign Investment | Under 10% of transactions | Steady international interest |
What has been Lima's average annual property price growth over the past 10 years?
Lima's residential property market has delivered consistent appreciation averaging 5% annually over the past decade.
Central districts including Miraflores, San Isidro, Surco, and Barranco have significantly outperformed this average, experiencing price increases up to 12% yearly during peak periods. These premium areas contrast sharply with the national average, which remains much lower due to slower growth in secondary cities.
In dollar terms, this appreciation translates to approximately $100 per square meter annually in prime districts where average prices reach $2,000 per square meter as of 2025. Mid-tier districts with prices ranging from $1,000-1,300 per square meter see annual increases of $50-65 per square meter.
As of September 2025, market expectations point toward 3-7% nominal price growth continuing through 2026, supported by persistent housing shortages and steady household formation.
What are current property prices per square meter in Lima's different districts?
Lima's property market shows significant price variation between central and outer districts, reflecting differences in infrastructure, amenities, and location desirability.
| District Category | Apartments ($/sqm) | Houses ($/sqm) |
|---|---|---|
| Central Districts (Miraflores, San Isidro, Surco, Barranco) | $1,800-2,500 | $2,200-3,500 |
| Mid-tier Districts (Jesús María, Surquillo, Magdalena) | $1,000-1,300 | $1,300-1,700 |
| Outer Districts (Comas, Villa El Salvador, Los Olivos) | $700-950 | $900-1,200 |
| Premium Locations (Top-tier Miraflores/San Isidro) | Up to $3,000 | Up to $4,000 |
| Emerging Areas (Surquillo, Magdalena borders) | $1,100-1,400 | $1,400-1,800 |
These price differentials create investment opportunities across various budget ranges, with outer districts offering higher rental yields while central areas provide stronger capital appreciation potential.
How many new housing units will be built in Lima during 2025 and 2026?
Lima faces a critical housing shortage that continues to worsen despite ongoing construction activity.
The city currently has a deficit of 1.9 million housing units while forming approximately 120,000 new households annually across Peru, with Lima accounting for a significant portion. In Q3 2024, residential sales reached 5,716 units, representing a 26% increase from the previous year, but this remains insufficient to meet demand.
Peru's construction sector is projected to expand by 3.8% in 2025, translating to modest growth in housing unit completions. Industry forecasts suggest 2025-2026 will see 4-6% more housing completions compared to the 2022-2024 period, though specific unit numbers remain difficult to quantify precisely.
This supply-demand imbalance continues to support upward pressure on property prices across all Lima districts, particularly in areas with better infrastructure and amenities.
It's something we develop in our Peru property pack.
What is Lima's current population growth and household formation rate?
Lima's demographic growth remains a key driver of housing demand in 2025.
The metropolitan area's population reached 11,517,000 in 2025, representing a 1.36% increase from 2024. This growth translates to approximately 155,000 additional residents annually, creating substantial pressure on the housing market.
Based on Lima's average household size of 4.2 people, this population increase generates roughly 37,000 new households per year requiring housing. This consistent household formation rate, combined with the existing shortage of 1.9 million units, ensures continued strong demand for residential properties.
The steady population influx comes from both natural growth and internal migration from other Peruvian regions, as Lima remains the country's primary economic center attracting workers and families seeking better opportunities.
How tight is Lima's current housing inventory?
Lima's housing market exhibits clear seller's market conditions with exceptionally tight inventory levels.
Vacancy rates have dropped to just 5% in 2025, particularly in prime districts where available properties move quickly. This represents a significant tightening over the past 24 months as supply continues to lag behind demand growth.
The inventory shortage manifests in rapidly declining days on market, with prime properties now selling within weeks rather than the 3-6 months that was common outside premium districts just 3-5 years ago. Listings in 2024 showed a 9.8% year-over-year decrease in marketing time.
This tight inventory situation supports current price appreciation trends and suggests continued upward pressure on values through 2026, especially in central districts where land availability remains extremely limited.
What are current mortgage interest rates in Peru?
Peru's mortgage interest rates remain relatively stable in the mid-7% range as of 2025.
As of June 2025, the average mortgage rate stands at 7.44%, compared to approximately 7.41-7.42% in June 2024. This represents minimal change over the past year, providing consistency for property buyers planning purchases.
These current rates reflect a significant improvement from post-COVID highs that reached approximately 9.1% in 2022. The gradual decline has supported increased mortgage financing activity, though cash purchases remain common due to informal income structures affecting loan qualification.
Rate stability through 2026 depends on Peru's central bank policy and global interest rate trends, with potential for modest increases if US Federal Reserve rates continue rising.
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What inflation rates are expected for Peru in 2025 and 2026?
Peru's inflation outlook remains moderate, supporting stable property market conditions.
Projected inflation rates for 2025 and 2026 range between 2-3% annually, reflecting the central bank's commitment to price stability. This moderate inflation environment provides a favorable backdrop for real estate investment, as property often serves as an inflation hedge.
With nominal property price growth expected at 3-7% annually, real appreciation after inflation could range from 1-4% in most districts. Prime areas with stronger price momentum may deliver higher real returns, while outer districts might see more modest real gains.
The relatively low inflation environment means property buyers can focus on fundamental market drivers like supply shortages and demographic growth rather than worrying about currency devaluation or economic instability affecting their investments.
How have rental yields performed across Lima's districts?
Lima's rental yield landscape shows gradual compression but remains attractive compared to many international markets.
| District | Yield 2019-2023 | Yield 2025 | Trend |
|---|---|---|---|
| Miraflores | 5.0-5.5% | 5.2-5.6% | Slightly down |
| Barranco | 5.3-5.8% | 5.0-6.3% | Stable/Slightly up |
| San Isidro | 4.0-5.0% | 4.6-5.6% | Stable |
| Surquillo | 6.5-7.5% | 6.0-6.7% | Downward, high base |
| Lima Average | 6.4-7.0% | 6.0-6.4% | Gradual decrease |
The yield compression reflects rapid property price increases outpacing rental growth, particularly in prime districts where capital appreciation has been strongest. Despite this trend, Lima's yields remain solid compared to major international cities.
Emerging districts continue offering higher yields, while established areas provide more stable rental income with stronger long-term capital appreciation potential.
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 does household income growth compare to property price appreciation?
Lima's property market shows a concerning affordability gap as price growth significantly outpaces income increases.
Before 2020, real household incomes grew steadily at approximately 2-3% annually. However, the pandemic severely disrupted this trend, with incomes dropping 10.5% between 2019 and 2021. Recovery has been gradual, with income growth still below pre-pandemic levels.
Meanwhile, property prices in top districts have maintained 5-6% annual appreciation over the past decade, creating a widening affordability gap. This divergence means fewer middle-class families can afford homes in prime areas, concentrating demand among higher-income buyers and investors.
The income-price gap supports continued price appreciation in desirable districts while potentially limiting demand growth in the broader market. This dynamic particularly benefits investors with capital access while challenging first-time homebuyers.
What role do foreign buyers play in Lima's property market?
Foreign investment in Lima's residential market remains active but represents a relatively small portion of total transactions.
International buyers account for less than 10% of overall property transactions, focusing primarily on high-end districts like Miraflores, San Isidro, and Barranco. These buyers are attracted by Lima's solid rental yields and limited supply in premium locations.
Foreign investor activity tends to concentrate on apartments and condominiums rather than houses, seeking properties suitable for rental income or occasional personal use. The limited foreign ownership restrictions in Peru make the market accessible to international buyers compared to other Latin American countries.
While foreign buyers don't drive overall market trends, their presence in premium segments helps support price floors and provides additional liquidity in high-end properties.
It's something we develop in our Peru property pack.
How are property purchases financed in Lima?
Lima's property financing landscape shows balanced usage between cash and mortgage transactions.
Approximately 50% of residential sales in 2024 were mortgage-financed, with the remaining 50% completed as cash transactions. This represents a 10% increase in cash sales over recent years, likely driven by tighter lending standards and affluent buyers seeking transaction speed.
Government programs like Nuevo Crédito Mivivienda have expanded mortgage access, helping boost the financed portion above historical levels. However, Peru's high informal economy rate limits mortgage qualification for many potential buyers, keeping cash transactions prevalent.
The balanced financing mix indicates a healthy market with buyers across different financial profiles, from cash-rich investors to qualified borrowers utilizing available credit programs. This diversity supports market stability and continued transaction volume.
How quickly do properties sell in Lima's current market?
Lima's property market demonstrates strong seller conditions with rapidly decreasing time to sale.
Average days on market have fallen significantly in 2024, with prime properties now moving within weeks rather than months. This represents a sharp 9.8% year-over-year decrease in listing duration compared to 2023, indicating strong buyer demand and limited inventory.
Three to five years ago, marketing periods of 3-6 months were common outside prime districts. Today's accelerated sales pace reflects the tight inventory conditions and active buyer competition, particularly in central areas where quality properties receive multiple offers quickly.
The shortened marketing periods benefit sellers but require buyers to act decisively when suitable properties become available. This dynamic supports current price trends and suggests continued market strength through 2026.
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.
Lima's property market shows strong fundamentals supporting continued price appreciation through 2026, driven by severe housing shortages and consistent household formation.
Investors and homebuyers should expect 3-7% annual price growth with prime districts likely achieving the higher end of this range, while rental yields remain attractive despite gradual compression.
Sources
- The Latin Investor - Lima Property Market Analysis
- The Latin Investor - Peru Price Forecasts
- Miami Congress - Peru Real Estate Report
- MyLatamHome - Lima Real Estate Analysis
- The Latin Investor - Peru Real Estate Market
- MacroTrends - Lima Population Data
- The Global Economy - Peru Mortgage Rates
- Global Property Guide - Peru Rental Yields