All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Thinking of investing in real estate in Lima? You're not alone!
Many people are enchanted by Lima's rich history and dream of owning a historic townhouse or a modern apartment in this city.
Would it be a smart investment, though? Are property prices increasing in Lima? What is the price per sqm? Should you consider investing in Miraflores or Barranco? And the taxes? What rental yields should I expect?
We've got it all sorted. No worries.
At TheLatinvestor, we've extensively researched this market; As a matter of fact, we've gathered all our findings in a pack. Get it now.
In the lines below, we will share some of this knowledge.
How's the real estate market in Lima?
When evaluating the strengths of a property market, everyone has their own opinion. We do things differently - we rely on data and actual facts.
In Lima, you can find a variety of properties for sale, including apartments, houses, condos, and commercial spaces.
Apartments are often found in tall buildings and are suitable for individuals or small families. Houses offer more space and are ideal for larger families or those who prefer a standalone property. Condos combine elements of apartments and houses, often providing amenities like swimming pools or gyms.
Commercial spaces are available for businesses looking to establish a presence in the city.
Each type of property offers different features and benefits to cater to various preferences and needs.
Better to buy or rent?
(If you're purchasing for personal use and not for renting)
Whether you've already made Lima your home or are considering it for the future, you might be pondering whether to buy or rent a property in this lively Peruvian capital.
Without a doubt, you should buy if you want to acquire equity and have the potential for long-term appreciation in value.
One data can help you make a decision - the property price-to-rent ratio. This number gives you an idea of how long it will take to break even on the property's purchase using rental income.
According to Numbeo, the property price-to-rent ratio in Lima is around 17.12, which is around the world average.
Simply put, it would typically require 17 years of rental payments to buy a property in Lima.
Property prices in Lima
On average, according to the last data from National Institute of Statistics and Informatics (INEI), purchasing a property in Lima will cost you around $1,990 per square meter.
Of course, prices vary. An apartment in Miraflores may have a different price per square meter than a house in San Isidro. We actually give you a more detailed breakdown in our pack for buying property in Lima and in Peru.
To put things in perspective, it means that, instead of purchasing a flat in Manhattan, you can obtain 7 properties in Lima.
Moreover, housing prices in Lima are way cheaper (-59%) than in Santiago.
The most expensive neighbourhoods in Lima are probably San Isidro and Miraflores, while the cheapest are likely Comas and El Agustino.
First and foremost, we have to acknowledge that Peru is, nowadays, a relatively stable country. The last Fragile State Index that has been reported for this place is 69.8.
It is something to have in mind when wondering whether it's a good investment to buy a property in Lima.
Besides that, if we look at the IMF's GDP forecasts, Peru's economy is expected to soar by 12.9% in the coming 5 years, resulting in an average GDP growth rate of 2.6%.
If you want to invest in real estate in Lima it's a good thing because, usually, when the economy grows, people make more money, and this encourages them to invest in real estate, which drives up the demand and prices for properties.
Also, in Peru, the average GDP per capita has changed by 0.4% over the last 5 years. Though not substantial, there is still a positive trend of growth.
This trend can lead to a rise of property prices in Lima over the course of 2024 and also later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Peru right now.
Buying property in Lima
Buying real estate in Lima can be challenging due to the difficulty of obtaining reliable and up-to-date information. That's why we have created the pack to buy property in Lima and in Peru.
In our pack, we've laid out all the steps involved in the buying process, including the required documents, taxes to be paid, and guidance on finding properties.
Now, we're giving you a more straightforward version to help you grasp the information more easily.
This is the step-by-step process to purchase a property in Lima:
- Obtain a Tax Identification Number (RUC) from the Peruvian tax authority (SUNAT).
- Choose a notary public to handle the property's legal transactions.
- Hire a real estate agent familiar with Lima's local market.
- Request a "Certificado de Gravamen" to check for existing liens on the property.
- Verify the property's ownership and boundaries with the Public Registry of Lima.
- Conduct a "Minuta de Compra-Venta" to outline the purchase agreement's terms.
- Sign the "Escritura Pública" (public deed) with the seller before a notary.
- Pay the property transfer tax ("Impuesto de Alcabala") to the Municipality of Lima.
- Obtain approval from the Foreign Affairs Ministry for foreign buyers.
- Secure financing from a local bank or provide proof of funds.
- Register the property transfer with the Public Registry to formalize ownership.
- Obtain the "Partida Registral" (property title) reflecting your name as the new owner.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Peru.
Make a profitable investment in Lima
Better information leads to better decisions. Save time and money. Download our guide.
Where to find a property
You may embark on your property search in Lima with the help of these websites.
- Realigro - A global real estate search engine specializing in property listings in Peru, offering homes for sale and valuable market insights.
- FazWaz - A leading real estate marketplace in Peru, showcasing a diverse selection of properties for sale, rent, and new developments across various regions.
- Properati - Properati is a comprehensive real estate platform in Peru, allowing users to find properties for sale and rent in various cities and neighborhoods.
- 4321Property - 4321 Property offers a real estate platform in Peru, facilitating searches for properties for sale across different cities and regions.
- Premier Casa Peru - Premier Casa is a full-service international real estate company in Peru, offering a wide array of properties for sale and rent.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Peru.
Which properties for which budget?
As mentioned before, the average price per sqm in Lima is $1,990. A one-bedroom property with an area of 60 square meters would cost approximately $119,000, while a two-bedroom with an area of 85 square meters would cost approximately $169,000.
However, prices will differ based on the attributes of the property and its specific location.
Prime property locations in Lima tend to come with higher price points. A residence in San Isidro might cost around $480,000, and a residence in Miraflores could be about $450,000.
However, there are also places that won't strain your finances as much. You may find a condominium in Breña for $70,000, or one in La Victoria priced only at $50,000.
We give a more detailed pricing list in our full pack for buying property in Peru.
Here are the main pitfalls specific to buying a property in Lima, Peru:
- Informal property rights (Posesión): Some properties might have informal possession, lacking proper legal titles, leading to ownership disputes and potential eviction threats.
- Regulatory changes (SUNARP): Keep an eye on changes in property registry laws (SUNARP) to avoid unexpected legal complications.
- Earthquake vulnerability: Assess seismic risks and ensure the property meets safety standards due to Lima's location in an earthquake-prone region.
- Land invasions (Invasiones): Watch out for properties located in areas prone to illegal land invasions, leading to legal conflicts.
- Water supply: Check for reliable water sources and consider potential water scarcity issues in certain neighborhoods.
- Coastal erosion: Properties near the coast might face erosion risks, affecting their long-term value and structural integrity.
- Slow construction permits (Licencias de Construcción): Delays in obtaining construction permits can impede property development plans.
- Local taxes (Impuesto Predial): Understand the property tax system (Impuesto Predial) and ensure all tax payments are up-to-date to avoid penalties.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Peru Property Pack
Living in Lima
Living in Lima is an exciting experience, offering a vibrant culture, beautiful scenery, and a wide range of amenities, making it an ideal place to invest in property.
Cost of living
The cost of living in Lima is generally quite affordable, with most necessities costing significantly less than in many other cities around the world. However, it is important to note that prices can vary greatly depending on the neighborhood and type of goods or services needed.
Here are some examples to better understand the cost of living in Lima, Peru:
- Rent for a one-bedroom apartment in the trendy Barranco neighborhood: $800 per month.
- A meal at a local cevicheria with a glass of Chicha Morada (purple corn drink): $15.
- Monthly public transportation pass for Metropolitano buses: $35.
- Utilities (electricity, water, gas) for a small apartment in San Isidro: $70 per month.
- A bottle of local Pisco Sour from a famous brand like Queirolo or Portón: $20.
- Traditional dish Causa Limeña at a restaurant: $10.
- Bus fare for a short city trip using the electronic payment card, Lima Pass: $0.50.
- A cup of organic Peruvian coffee at a specialty café in Surco district: $3.50.
We want to show information in an easy-to-understand way. So, we made a summary table to show the different areas in Lima. For yields, prices and rents, check our property pack.
Miraflores is a popular upscale neighborhood located along the cliffs overlooking the Pacific Ocean. It offers a vibrant and trendy atmosphere with parks, shopping centers, and a lively dining and nightlife scene.
Beautiful ocean views, modern amenities, cultural attractions.
Higher cost of living, heavy traffic during peak hours.
Barranco is a bohemian and artistic neighborhood with colorful colonial architecture, art galleries, and a relaxed ambiance. It's known for its lively music and cultural events.
Artistic and cultural scene, charming streets, scenic views.
Limited public transportation, some areas may lack modern facilities.
San Isidro is an upscale and affluent neighborhood with modern office buildings, luxury residences, and green spaces. It's a major financial and business hub in Lima.
Financial district, upscale housing, well-planned urban design.
Higher cost of living, limited affordable housing options.
Surco is a residential neighborhood known for its family-friendly environment and recreational areas. It offers a mix of housing options and has good access to schools and shopping centers.
Quiet living, green spaces, proximity to schools and amenities.
Can be distant from central Lima, traffic during rush hours.
Jesus Maria is a central district with a mix of residential and commercial areas. It's known for its traditional market, historical sites, and affordable housing options.
Central location, affordable housing, cultural heritage.
Traffic congestion, limited upscale amenities.
La Molina is a suburban neighborhood with gated communities and large houses. It's known for its tranquility, green areas, and private schools.
Safe environment, spacious properties, good schools.
Can be distant from central Lima, limited public transportation.
Callao is a port city and district with an industrial and maritime significance. It's home to the Jorge Chavez International Airport and has historical sites like the Real Felipe Fortress.
Port facilities, proximity to the airport, historical landmarks.
Industrial areas, some parts may be less safe for tourists.
Ate is a diverse district with residential and industrial areas. It offers various dining options and entertainment centers, including the popular Jockey Plaza shopping mall.
Cultural diversity, shopping and dining options, recreational spaces.
Industrial presence, traffic congestion during peak hours.
Lince is a centrally located neighborhood with a mix of residential and commercial areas. It's known for its parks, sports facilities, and local eateries.
Convenient location, recreational areas, local food scene.
Some parts may be less safe, traffic congestion during rush hours.
Magdalena del Mar
Magdalena del Mar is a coastal neighborhood with a relaxed and laid-back atmosphere. It offers scenic views of the ocean and easy access to recreational areas.
Coastal views, recreational spaces, peaceful environment.
Less developed public transportation, limited upscale amenities.
Life in Lima
Lima is the economic hub of Peru and is home to a thriving economy. The city has experienced strong economic growth in recent years, driven by the expansion of the manufacturing, retail, and tourism sectors.
What expats usually like the most in Lima is the city's vibrant culture and its diverse range of dining options, from traditional Peruvian cuisine to international flavors. Lima's beautiful beaches and colonial architecture are also popular among expats.
However, the crime rate of Lima is still very high (with a value of 71, one of the worst scores in the world). The most common crimes in Lima are theft, robberies, and assaults.
Also, you have to know that Lima faces the risk of earthquakes and has concerns about water supply due to its desert location and limited rainfall.
A good point for a property investor - Lima has a mass rapid transit system known as the Metropolitano, which consists of a network of buses and a metro line.
Access to healthcare in Lima is very good, with a Healthcare Index of 58. An effective healthcare infrastructure always boost the appeal of a place, which is good for real estate.
Don't lose money on your property in Lima
100% of people who have lost money in Peru have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Renting out in Lima
This section is for you if your goal is to buy a property and rent it out to generate income.
Tenant Profiles in Lima
If you decide to buy and rent out to long-term tenants, you should target middle-class professionals, students, and expats. For short-term rentals, you should focus on travelers and tourists looking for a place to stay in Lima.
Here is a little summary table we've made for you.
|Property type and area
|Profiles of potential tenants
|What they are looking for
|Expected monthly rent in $
Apartment in Miraflores
Expats, young professionals
Urban lifestyle, ocean views
$800 - $1500
Condo in San Isidro
Business professionals, families
Business district, upscale living
$1200 - $2500
Studio in Barranco
Artists, young couples
Bohemian atmosphere, cultural scene
$600 - $1200
Apartment in Surco
Quiet residential area, parks
$800 - $1500
House in La Molina
Suburban living, spacious properties
$1500 - $3000
Apartment in Jesus Maria
Students, young professionals
Accessible to universities, budget-friendly
$600 - $1200
Condo in Pueblo Libre
Historical charm, cultural sites
$800 - $1500
Nowadays, the rental yields you get in Lima are between 5% and 7%. There are some opportunities. So you know, a "good" rental yield is above 7%.
Rental yields in Lima tend to be highest for properties located in the city's more desirable neighborhoods, such as San Isidro and Miraflores, due to the strong demand from expatriates and upper-income Peruvians for these areas. Additionally, properties located close to universities and other large employers tend to have higher rental yields due to the increased demand from students and young professionals.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Lima are taxed at 30%, which is relatively high.
You could also decide to rent short-term to business travelers, tourists, and digital nomads visiting Lima. Additionally, you could rent to expats and students relocating to Lima for a short period of time.
If you decide to go with that option, look for properties in Miraflores, San Isidro, Barranco, or La Molina. These are some of the most desirable areas in Lima and have a high demand for short-term rentals.
You will have some competition though - there are around 18,000 Airbnb listings in Lima. The average daily rate stands around $57.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Lima can make around $500 per month. Also, the average occupancy rate is estimated at 43%.
Is it worth buying real estate in Lima then?
Investing in property in Lima is a smart choice if you're in it for the long haul. Lima's property market offers affordability and potential for long-term equity growth. The price-to-rent ratio is reasonable, indicating that you can break even with rental income over time. With Lima's relatively stable economy and forecasts of GDP growth, there's optimism for property value appreciation. Plus, rental income opportunities abound in this diverse city.
However, if you're planning a short stay or concerned about safety, it might not be the best idea. Lima's high crime rate and earthquake risks should be taken seriously. Additionally, the 30% rental income tax can eat into your profits. Property-related challenges, such as informal rights and regulatory changes, can lead to legal headaches.
So, while Lima offers exciting investment potential, it's essential to align your goals and risk tolerance with the city's unique characteristics before diving into its real estate market.
Make sure you understand the real estate market in Lima
Don't rush into buying the wrong property in Peru. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.