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Property prices in Peru are expected to continue rising moderately in 2026, driven by steady demand and limited housing supply.
Lima's residential market shows the strongest growth potential with 10% price increases in 2024-2025, while secondary cities like Arequipa and Cusco maintain stable appreciation rates. Economic fundamentals support continued property value growth, though inflation will limit real gains.
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Peru's property market shows steady growth with Lima leading at 10% annual increases, while mortgage rates remain around 7.44% and rental yields average 5.97% nationally.
Government housing policies and population growth in major cities support continued price appreciation, though supply constraints and inflation impact affordability.
| Key Metric | Current Status (2025) | 2026 Projection |
|---|---|---|
| Lima Property Prices | $1,500/m² (+10% in 2024-2025) | Continued moderate growth |
| Mortgage Interest Rate | 7.44% | Stable to slightly higher |
| GDP Growth | 2.8% | 2.6% |
| Inflation Rate | 2.5% | 2.8% |
| Rental Yield (Lima) | 6.45% | Stable around 6% |
| Housing Demand vs Supply | 1.9M homes needed | Supply gap continues |
| Lima Population | 11.06M | 11.67M |
What has been the historical annual growth rate of property prices in Peru over the past 10 years?
Peru's residential property market has shown moderate but consistent growth over the past decade, with significant regional variations.
Nationwide, property prices experienced average annual nominal growth of 3-7% between 2015 and 2025. However, when adjusted for inflation, real price increases have been minimal, especially from 2020 onward due to economic pressures from the pandemic and political uncertainty.
Lima's property market has outperformed the national average with annual growth averaging 5% over the past five years (2020-2025). The capital city's property values have essentially doubled since 2015, making it the strongest performing market in Peru.
In 2024-2025 specifically, Lima experienced exceptional growth of around 10%, with premium districts seeing gains of up to 19%. This acceleration reflects renewed investor confidence and limited supply in desirable areas.
It's something we develop in our Peru property pack.
What is the current average cost per square meter for residential properties in Peru's major cities?
| City | Average Price (USD/m²) | Annual Growth Since 2020 |
|---|---|---|
| Lima | $1,500 | 5% per year (10% in 2024-2025) |
| Cusco | $1,200 | 3.8% per year |
| Arequipa | $1,000 | 4.5% per year |
| Trujillo | $800-1,000 | 6% per year |
How many new housing units are expected to be built in Peru in 2025 and 2026?
Peru's housing construction sector faces a significant supply-demand imbalance that will persist through 2026.
In Lima alone, over 12,000 residential units were sold in the first half of 2025, with the majority being VIS (social interest housing) units targeting middle and lower-income buyers. This represents continued strong demand in the capital.
However, the national housing deficit remains massive at approximately 1.9 million homes. New construction deliveries cover only a small fraction of this annual demand, creating persistent upward pressure on prices.
The construction industry is expected to expand by 3.8% in 2025, but this growth rate is insufficient to meaningfully address the housing shortage. Supply constraints will continue supporting property price appreciation through 2026.
What is the current mortgage interest rate in Peru and what are the 2026 forecasts?
As of September 2025, Peru's mortgage market shows the following characteristics.
The average bank lending rate stands at 7.44% as of June 2025. Typical mortgage rates range from 7-11% for standard 20-year terms, while developer financing options can range from 8-12% depending on the project and buyer profile.
For 2026, mortgage rates are expected to remain steady or rise slightly if inflation persists above the central bank's target range. The Central Bank of Peru has maintained a cautious monetary policy stance to control inflation while supporting economic growth.
These rates remain competitive compared to historical levels and support continued mortgage market activity, particularly in the government-subsidized housing segments.
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What percentage of household income is currently spent on housing in Peru?
Peruvian households allocate a significant portion of their income to housing costs, reflecting the country's affordability challenges.
As of 2025, Peruvian households spend approximately $1,090 per capita annually on housing-related expenses. This typically represents 20-35% of household income, depending on the income bracket and location.
This housing cost burden is comparable to regional peers such as Colombia and Chile, placing Peru within the typical range for Latin American countries. However, it indicates that housing affordability remains a significant concern for many families.
The relatively high housing cost ratio supports continued demand for government housing subsidies and affordable housing programs, which are major drivers of the formal housing market.
What is Peru's expected GDP growth rate for 2025-2026 and how does it correlate with real estate prices?
Peru's economic outlook for the next two years shows moderate but stable growth that supports real estate market fundamentals.
The OECD projects GDP growth of 2.8% for 2025 and 2.6% for 2026. While these rates are modest, they represent steady economic expansion that historically correlates with property price appreciation in major cities.
Historical data shows a strong link between economic expansion and property price trends in Lima and other major cities. When GDP grows above 2.5%, real estate markets typically see nominal price increases of 4-8% annually.
The projected growth rates support continued moderate real estate appreciation, particularly in Lima where economic activity is concentrated. However, the modest growth pace suggests property price increases will remain reasonable rather than entering bubble territory.
How many foreign buyers purchased property in Peru in 2024 and what are 2026 expectations?
Foreign investment in Peru's residential property market remains a small but growing segment with recovery potential.
In 2024, foreign buyers represented a modest portion of total property transactions, well below the peaks seen before the pandemic. Political stability concerns and regulatory uncertainties have kept international investment levels subdued.
For 2026, a modest increase in foreign buyer activity is predicted, contingent on several factors. Legal reforms to simplify property acquisition processes and improved residency policies could attract more international investors.
The government has shown interest in attracting foreign investment to boost the construction sector and address housing demand. Success in this area could provide additional upward pressure on property prices, particularly in Lima's premium districts and tourist destinations like Cusco.
It's something we develop in our Peru property pack.
What is the annual inflation rate projection for Peru between 2024 and 2026?
Peru's inflation outlook shows a gradual increase that will impact construction costs and property prices.
The projected inflation rates are 2.2% for 2024, 2.5% for 2025, and 2.8% for 2026. These rates remain within the Central Bank's target range but show an upward trend that affects real estate costs.
Construction materials costs have experienced higher inflation rates, which increases development expenses and ultimately impacts property prices. However, the pace of price rises has slowed compared to the immediate post-pandemic period.
Property prices are anticipated to rise nominally in line with or slightly above inflation rates. However, inflation-adjusted (real) growth will be minimal, meaning buyers should expect modest real gains rather than dramatic appreciation.
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 is the average rental yield in Peru's main cities and how has it trended?
| City | Average Rental Yield (2025) | 5-Year Trend |
|---|---|---|
| Lima | 6.45% | Stable with slight compression |
| Arequipa | 5.49% | Steady around 5.5% |
| Peru National Average | 5.97% | Range of 5.5-7% |
| Cusco | 5.8% (estimated) | Tourism-dependent volatility |
| Trujillo | 6.2% (estimated) | Relatively stable |
How much has the population of Lima and other large cities grown in the past decade?
Peru's urbanization continues to drive demand for housing in major cities, with Lima leading population growth.
Lima's urban population has increased dramatically from 9.7 million in 2015 to 11.06 million in 2025, representing growth of approximately 2 million people over the decade. This translates to an annual growth rate of about 1.7%.
For 2026, Lima's population is projected to reach 11.67 million, continuing the steady urbanization trend. This population pressure directly translates to increased housing demand and supports property price appreciation.
Other major cities show more modest growth patterns. Arequipa has remained stable around 950,000 residents, while Trujillo has grown from 800,000 to 892,000. Cusco has expanded from 430,000 to 489,000, driven partly by tourism recovery.
The concentration of population growth in Lima reinforces the capital's position as Peru's primary real estate investment market, with the strongest fundamentals for continued price appreciation.
What percentage of property purchases in Peru are made with cash versus mortgages?
Peru's property financing landscape shows a significant reliance on cash transactions, though mortgage usage is increasing.
Cash purchases still represent more than 50% of property transactions, reflecting limited credit access for many buyers and a cultural preference for debt-free ownership. This high cash ratio is typical for developing markets in Latin America.
Since 2020, there has been a notable shift toward increased mortgage usage, especially among middle-class buyers and in the social housing segments. This change is driven by expanded government subsidies and historically low interest rates during the pandemic period.
The formal mortgage market is growing, supported by government programs like Nuevo Crédito Mi Vivienda (NCMV) and Techo Propio, which provide subsidies and make financing more accessible to qualified buyers.
This gradual shift toward mortgage financing supports market stability and provides more predictable demand patterns, contributing to steady price appreciation rather than volatile cash-driven cycles.
What are the government's housing policies and subsidies planned for 2025-2026?
Peru's government has implemented comprehensive housing policies with substantial budget increases to address the housing deficit.
The main programs include Nuevo Crédito Mi Vivienda (NCMV) and Techo Propio, which provide direct subsidies through programs like BBP (Bono del Buen Pagador) and BFH (Bono Familiar Habitacional). These programs target different income segments and property types.
For 2024-2026, the government introduced the "Bono Integrador BBP," which adds approximately $895 in additional subsidies for vulnerable groups. This represents a significant expansion of housing support.
Budget allocations show strong government commitment, with substantial increases in local and regional housing expenditures announced for 2025. Local housing budgets increased by 7.3% while regional budgets grew by 24.2%.
These policy initiatives and budget expansions are major drivers for formal housing market growth and mortgage market development. They provide crucial support for continued demand and price stability in the residential sector.
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 property market in 2026 will likely continue its moderate upward trajectory, driven by steady economic growth, persistent housing shortages, and supportive government policies.
Lima remains the most attractive investment destination with the strongest price appreciation potential, while secondary cities offer stable returns with lower entry costs.