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Everything you need to know before buying real estate is included in our Peru Property Pack
Peru's residential real estate market in mid-2025 presents a complex picture for potential buyers.
While nominal property prices are rising across major cities, real-term growth remains weak due to inflation. Foreign buyers enjoy open ownership rights with few restrictions, and rental yields remain attractive at around 6%. However, high mortgage rates, political uncertainty ahead of 2026 elections, and modest real price appreciation create challenges.
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.
| Factor | Status | Does it make it a good time to buy? |
|---|---|---|
| Property Prices | Rising nominally but flat in real terms | Mixed - opportunities in emerging areas |
| Rental Yields | 6%+ average yields | Yes - above regional average |
| Mortgage Rates | 7-11% for foreigners | No - high financing costs |
| Infrastructure | Major projects underway | Yes - creating value corridors |
| Political Climate | 2026 elections approaching | Mixed - uncertainty but stability expected |
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.
Are current property prices in Lima offering good opportunities for buyers in June 2025?
Property prices in Lima present a mixed opportunity in June 2025.
While nominal prices are forecast to rise 3-7% this year, real-term values continue to decline when adjusted for inflation. In Q3 2024, Lima saw only a 0.1% nominal increase but a 1.7% real decline. Prime districts like Miraflores, San Isidro, and Barranco command premium prices at around $1,500 per square meter, but the luxury segment has been particularly weak due to political uncertainty.
The best opportunities exist in emerging districts benefiting from new infrastructure, particularly areas connected to the expanding Lima Metro system and the new $3.4 billion ring road project. Mid-range properties offer better value than luxury units, which have seen price declines in recent years.
Foreign buyers should focus on neighborhoods with confirmed infrastructure improvements and avoid speculative luxury purchases that have underperformed the broader market.
As of today, are there more buyers or sellers in Peru's residential market?
The Peru residential market in June 2025 is experiencing increased buyer activity compared to the 2023-2024 period.
Transaction volumes are recovering from previous stagnation, but supply remains constrained in key markets. Lima's prime areas face buyer competition due to limited new supply and high demand for quality units. Arequipa experiences severe undersupply with 15% demand growth versus limited new developments.
| City | Market Balance | Key Factors |
|---|---|---|
| Lima | Buyer competition in prime areas | Limited new supply, high demand for quality units |
| Arequipa | Severe undersupply | 15% demand growth vs limited new developments |
| Trujillo | Balanced but tightening | Infrastructure investments attracting buyers |
| Cusco | Tourist-driven demand | International buyers competing for limited stock |
| Secondary Cities | More seller-friendly | Less competition, more negotiation room |
The market particularly favors sellers in prime urban locations, while buyers have more negotiating power in secondary markets and older buildings requiring renovation.
What are the short-term and long-term price forecasts for properties in Peru as of mid-2025?
Short-term forecasts for 2025-2026 indicate nominal price growth but limited real appreciation.
Lima residential properties are expected to see 3-7% nominal increases, though these gains will be largely offset by inflation. Arequipa stands out with potential 9% nominal growth due to severe supply constraints. Trujillo properties should see steady 5-7% nominal increases driven by infrastructure development. The national average points to 4-6% nominal growth with minimal real appreciation.
Long-term forecasts for 2027-2030 suggest continued urbanization will drive 4-5% annual nominal growth. Real appreciation depends heavily on political stability following the 2026 elections. Infrastructure completion in 2027-2028 is expected to boost connected areas by 10-15%. The growing middle class will continue supporting sustained demand for modern amenities.
It's something we develop in our Peru property pack.
The key risk remains political uncertainty, which could dampen foreign investment and luxury segment recovery. Investors should focus on fundamentally strong locations rather than speculative plays.
Are current mortgage rates favorable for property buyers in Peru today?
Mortgage rates in Peru remain challenging for buyers in June 2025.
The average bank lending rate has risen to 14.9%, significantly higher than most regional markets. For foreign buyers, rates typically range from 7-11% for 20-year terms. Requirements include 20-30% down payment, valid residency status, local bank account, and comprehensive income documentation.
Local banks offer peso-denominated loans at 9-11% for residents with local income, while dollar-denominated loans range from 7-9% but require higher down payments. International financing at 5-7% remains the best option for those who can secure it through home country assets. Developer financing at 8-12% varies by project.
Given these high rates, cash buyers or those who can secure international financing have significant advantages in the current market. The financing environment heavily favors those who can minimize their borrowing needs.
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Are Peru residential properties regarded as safe investments today?
Peru residential properties offer moderate safety as investments in June 2025.
Positive factors include stable rental yields around 6% (above many regional markets), open foreign ownership laws with clear property rights, steady urbanization supporting long-term demand, dollar-denominated transactions reducing currency risk, and a growing middle class driving housing demand. These fundamentals provide a solid foundation for property investment.
Risk factors include political instability with elections in 2026, limited real price appreciation when adjusted for inflation, high financing costs reducing leveraged returns, concentration risk in Lima as the most liquid market, and weak luxury segment performance. These challenges require careful consideration and risk management.
For risk-averse investors, mid-range properties in established neighborhoods offer the best balance of stability and returns. The market suits long-term holders seeking rental income rather than quick capital gains.
Which specific neighborhoods in Peru offer the best value for buyers right now?
Lima's best value neighborhoods include Jesús María, Pueblo Libre, and Magdalena del Mar.
Jesús María offers central location advantages at 20% below Miraflores prices with strong rental demand. Pueblo Libre benefits from university area dynamics, consistent yields, and planned metro access. Magdalena del Mar provides coastal proximity, an emerging dining scene, and good infrastructure. Surquillo borders premium districts while gentrifying, offering 30-40% price discounts. San Miguel leverages airport proximity, commercial development, and middle-class stability.
In Arequipa, Cayma delivers traditional charm at 15% below Yanahuara with mountain views. José Luis Bustamante attracts young professionals with modern development. Cerro Colorado represents a rapid growth area with new infrastructure and affordable entry points.
Properties near confirmed metro stations trade at 10-15% premiums, while pre-construction units in infrastructure corridors offer 20% discounts. Renovation opportunities in traditional neighborhoods can yield 25-30% value uplift.
What types of properties offer the best value in Peru today?
Two-bedroom apartments (60-80m²) offer the best investment potential in Peru's current market.
These units typically yield 6.5-7.5% at price points of $90,000-120,000, making them ideal for rental investors. Mixed-use properties command 7-8% yields at $150,000-250,000, providing income diversification. Student housing near universities delivers the highest yields at 7.5-8.5% with entry points of $50,000-80,000.
Renovation projects offer 5-6% post-renovation yields when purchased at 30% below market, appealing to value-add investors. New eco-developments yield 5.5-6.5% at premium pricing but offer long-term appreciation potential.
Properties to approach with caution include luxury penthouses (oversupplied with weak demand), studio apartments under 35m² (limited financing options), properties over 15 years old without updates (high maintenance costs), and ground floor commercial spaces in residential areas (zoning restrictions).
How do current infrastructure projects affect property values in Peru today?
Major infrastructure investments are creating significant value opportunities across Peru in June 2025.
The Lima Metro expansion generates substantial premiums, with properties within 500m of new stations commanding 15-20% higher prices. The 500m-1km radius sees 10-15% value increases. Line 2's confirmed 2026 completion drives speculation in eastern districts, while Line 3's planning phase creates early investment opportunities in northern corridors.
The $3.4 billion ring road project benefits peripheral districts with 5-10% annual gains. Logistics-friendly areas attract mixed-use development, while commute time reductions of 40% drive residential demand. Regional infrastructure like the Northern Highway expansion between Trujillo and Chimbote has increased land values by 20%.
It's something we develop in our Peru property pack.
Properties in infrastructure corridors typically outperform market averages by 3-5% annually during construction phases, making proximity to confirmed projects a key value driver.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Peru. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
Are there favorable tax incentives for property investors in Peru right now?
Peru offers several competitive tax advantages for property investors in June 2025.
The current tax structure features a flat 5% tax on gross rental income, very competitive regionally. Capital gains for non-residents face 30% tax (high but avoidable through planning). Annual property tax ranges from 0.2-1.0% of assessed value, typically below market values. Transfer tax stands at 3% after approximately $15,000 deduction.
| Tax Incentive | Benefit | Requirements |
|---|---|---|
| FIBRI/FIBRA Funds | 5% tax rate on rental income | Minimum $10,000 investment |
| Principal Residence Exemption | No capital gains tax | 2+ years occupancy |
| Depreciation Benefits | 3% annual depreciation | Rental properties only |
| Tax Treaty Benefits | Reduced withholding | Treaty country residence |
These incentives make Peru attractive for income-focused investors, particularly through FIBRI/FIBRA funds offering professional management and liquid secondary market trading.
What are the current visa and residency implications for property buyers in Peru?
Property purchase alone does not grant residency in Peru, but several pathways benefit property owners.
The Rentista (Passive Income) visa requires $1,000/month income, with rental income qualifying, leading to permanent residency after 2 years. The Investor Visa demands $30,000 business investment, suitable for property development projects. Retirement visas need $1,000/month pension, with property ownership strengthening applications.
Tourist visas allow 90-183 days for property shopping. Power of attorney enables remote purchases. Bank accounts require temporary residency minimum. Permanent residency becomes available after 2-3 years of legal residence. No citizenship pathway exists through property investment alone.
Recent 2025 regulations have streamlined MERCOSUR resident applications, benefiting buyers from member countries. Property ownership strengthens residency applications but remains insufficient alone - investors should plan visa strategy before purchase.
How does Peru's property market compare to neighboring countries today?
Peru offers the highest rental yields among stable Latin American markets in June 2025.
Lima's $1,500/m² pricing sits well below Santiago ($3,500/m²) and São Paulo ($2,800/m²), making entry more accessible. Peru's 6.09% rental yields exceed Chile's 3-6% and Brazil's 3-5%, though mortgage rates at 7-11% for foreigners remain higher than Chile's 4-7%. Foreign ownership rules are simpler than Brazil's complex regulations.
Peru's competitive advantages include highest rental yields among stable markets, lower entry prices than Chile/Brazil, simpler foreign ownership than Brazil, better infrastructure than Ecuador, and a growing economy versus Chile's stagnation. Disadvantages include higher political risk than Chile, more expensive financing than Chile, weaker currency than dollarized Ecuador, less developed REIT market than Colombia, and a smaller luxury segment than Brazil.
For yield-focused investors, Peru offers the best returns. For capital preservation, Chile remains superior despite lower yields. The choice depends on individual risk tolerance and investment objectives.
What immediate steps should buyers take in Peru's market today?
Buyers should act strategically within the next 30 days to capitalize on current opportunities.
First, secure financing pre-approval by comparing local versus international options, locking rates if possible as they trend upward, and preparing 30% down payment for best terms. Target specific opportunities by focusing on metro-adjacent properties, prioritizing 2-3 bedroom units, and avoiding the luxury segment unless offered 20%+ discounts.
Legal preparation requires engaging a bilingual attorney, obtaining a tax ID (RUC), and opening a local bank account if resident. Conduct thorough market research by visiting properties during both weekday and weekend times, checking construction permits nearby, and verifying infrastructure timelines.
It's something we develop in our Peru property pack.
Red flags to avoid include properties with unclear titles, buildings over 20 years without renovation, coastal properties within 50m of shore, promises of guaranteed appreciation, and pressure for immediate decisions. Due diligence must include 30-year title search, municipal permit verification, utility payment history, building administration finances, and neighborhood crime statistics.
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.
June 2025 presents a reasonably favorable opportunity for property buyers in Peru, particularly for those with cash or international financing access.
While real price appreciation remains minimal, the combination of 6%+ rental yields, improving infrastructure, and stable economic fundamentals creates solid investment conditions. Foreign buyers benefit from open ownership laws and a weakened luxury segment offering discounts. However, success requires careful property selection, focusing on middle-market units in infrastructure corridors rather than speculative luxury purchases. With 2026 elections approaching, buyers who act now can secure properties before potential post-election appreciation while generating attractive rental income. The market favors patient, income-focused investors over those seeking quick capital gains.
Sources
- The Latin Investor - Peru Real Estate Trends
- Global Property Guide - Peru Price History
- The Latin Investor - Lima Price Forecasts
- The Latin Investor - Peru Price Forecasts
- The Latin Investor - Peru Real Estate Market
- Statista - Peru Real Estate Outlook
- The Latin Investor - Peru Real Estate Foreigner Tips
- The Latin Investor - Peru Real Estate Foreigner Guide
- Baker McKenzie - Peru Real Estate Law
- Expat Focus - Peru Property Buying Guide
- CEIC Data - Peru Bank Lending Rate
- Trading Economics - Peru Interest Rate
- Apart Hotel - Financing Property in Peru
- OECD Economic Outlook - Peru 2025
- BBVA Research - Peru Economic Outlook March 2025
- Global Property Guide - Peru Taxes and Costs
- Chambers Practice Guides - Peru Real Estate Comparison
- RGB Avocats - Tax on Real Estate Transactions in Peru
- Apart Hotel - Peru Property Analysis
- Global Property Guide - Peru Rental Yields
- Ecovis - Real Estate Investment in Peru
- Peru Biz Connect - Investing in Peru Real Estate
- Highways Today - Peru Infrastructure Projects
- New York Times - Lima Peru Homes Sale
- World Bank - Peru Overview