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House prices in Arequipa are unlikely to go down in the near future based on current market conditions as of September 2025.
The Arequipa housing market is experiencing strong demand with limited supply, supported by population growth, economic expansion, and ongoing infrastructure development that continue to push property values upward despite rising mortgage rates.
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.
Arequipa's housing market shows strong upward pressure with prices rising 9% year-over-year in 2025, driven by sustained demand and housing shortages.
Current market conditions including population growth, economic expansion, and limited housing supply suggest prices will continue rising over the next 12-24 months.
| Market Factor | Current Status (2025) | Impact on Prices |
|---|---|---|
| Average House Price | S/1,890,000 ($500,000) | Upward pressure |
| Price Growth (Last 12 months) | +9% year-over-year | Strong upward trend |
| Housing Supply | 1,300-1,400 active listings | Supply shortage driving prices up |
| Demand Level | +15% increase in 2025 | High demand supporting prices |
| Population Growth | 1.34% annual growth | Steady demand increase |
| Mortgage Rates | 7.44% (up from 6.6% in 2022) | Slight cooling but still manageable |
| Expert Forecast | 5-10% annual increases expected | Continued upward pressure |
What's the current average house price in Arequipa?
The median house price in Arequipa stands at S/1,890,000 (approximately $500,000) as of September 2025.
The average price per square meter reaches S/3,480 (about $1,000), with new mid-range apartments of around 87 square meters selling for approximately S/451,000 in popular districts like Cayma and Yanahuara.
These prices reflect Arequipa's position as Peru's second-largest city and an important economic hub, where property values have remained competitive compared to Lima while offering better affordability for both local and foreign buyers.
The pricing structure varies significantly by district, with central areas commanding premium prices while emerging neighborhoods offer more accessible entry points for first-time buyers.
How have house prices in Arequipa changed over the past 5 to 10 years?
Arequipa's housing market has experienced substantial growth over the past decade, with prices surging 9% year-over-year from 2024 to 2025.
Since 2020, mid-range properties have seen cumulative increases of 20-30%, particularly concentrated in central districts where demand has been strongest.
The most significant growth occurred in the last two years, following a market rebound from pandemic-related dips and benefiting from the recovery in Peru's mining sector, which is crucial for Arequipa's economy.
This upward trajectory has outpaced national inflation rates, indicating genuine market appreciation rather than merely currency devaluation effects.
What's the current supply of houses on the market in Arequipa?
Arequipa's housing market faces a structural supply shortage with only 1,300-1,400 residential properties actively listed on major real estate platforms at any given time.
The annual housing deficit is growing at approximately 6%, indicating that new construction is not keeping pace with population growth and housing demand.
New residential projects are primarily concentrated in neighborhoods like Cayma and Yanahuara, featuring apartments and condominiums, but overall supply remains tight across all market segments.
This supply constraint is a primary driver of the current price appreciation, as buyers compete for limited available properties.
It's something we develop in our Peru property pack.
What's the demand level for buying homes in Arequipa right now?
Housing demand in Arequipa has surged by 15% in 2025, creating one of the most competitive residential markets in recent years.
The primary drivers include steady population growth, ongoing urbanization, internal migration from rural areas, and job creation in mining and infrastructure sectors.
Main buyers consist of local families seeking to upgrade their housing situations and newcomers attracted by Arequipa's economic opportunities and quality of life.
The combination of limited supply and high demand has created a seller's market where properties in desirable locations often receive multiple offers.
What's the average time it takes to sell a house in Arequipa today?
While specific data for Arequipa is not publicly available, national trends and urban market conditions suggest houses typically sell within 1-3 months in hot markets.
Given Arequipa's high demand and limited supply conditions, properties in popular locations likely sell faster than the national average, particularly well-priced homes in central districts.
The tight market conditions mean sellers have pricing power, and properly marketed properties in good condition can expect relatively quick sales.
Factors affecting sale speed include location, property condition, pricing strategy, and the specific district within Arequipa's metropolitan area.
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What are the current mortgage interest rates in Peru, and how do they compare to the past few years?
Current mortgage interest rates in Peru average 7.44% as of September 2025, representing an increase from the record low of 6.6% reached in March 2022.
Despite this recent rise, current rates remain below the historical average of approximately 10% that characterized the period from 2001 to 2025.
The rate increase reflects Peru's central bank monetary policy adjustments in response to global economic conditions and inflation management efforts.
While higher than the pandemic-era lows, these rates are still considered manageable for qualified borrowers and continue to support housing market activity.
What's the employment and income trend in Arequipa, and are wages rising or stagnating?
Employment conditions in Arequipa show positive momentum with average salaries reaching 96,180 PEN per year (median) as of September 2025.
Annual wage growth is running at approximately 6%, with the strongest increases occurring in banking (8%), energy (7%), and information technology (6%) sectors.
Construction and education sectors are experiencing slower wage increases, but overall income trends remain positive across most employment categories.
The steady wage growth helps maintain housing affordability despite rising property prices, particularly for households in higher-growth employment sectors.
How is the Peruvian economy and inflation rate affecting household purchasing power in Arequipa?
Arequipa's economy is expanding robustly, driven by mining operations and infrastructure projects that provide a solid foundation for household income growth.
Peru's inflation rate was 1.65% in April 2025, remaining quite low and supporting real wage gains for most households in the region.
While housing prices are rising faster than general inflation, steady job creation and wage growth are helping offset cost pressures for many potential buyers.
The combination of economic expansion and controlled inflation creates favorable conditions for household purchasing power, though housing affordability remains a consideration for entry-level buyers.
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.
Are there any new housing projects or construction booms in Arequipa that could increase supply?
Arequipa is experiencing significant construction activity with numerous mid-range developments underway in districts like Cayma and Yanahuara.
City-wide infrastructure expansion includes new commercial areas, hospitals, and large-scale developments such as the Mallplaza project, which supports residential demand in surrounding areas.
Despite ongoing construction efforts, builders continue facing pressure to meet housing demand as the growing population and expanding economy attract more residents to the city.
The new projects are helping address supply shortages but are not yet sufficient to dramatically alter the supply-demand imbalance driving current price appreciation.
It's something we develop in our Peru property pack.
Is the local population in Arequipa growing, stable, or shrinking, and how does that affect housing demand?
Arequipa's metropolitan population reached approximately 984,000 in 2025, with steady annual growth of 1.34% from 2024.
While not explosive, this consistent population growth rate generates ongoing housing demand and continues to tighten market conditions.
The growth stems from both natural population increase and internal migration as people seek economic opportunities in Peru's second-largest city.
This demographic trend supports sustained housing demand and suggests continued upward pressure on property prices as new residents compete for available housing stock.
What do property experts or real estate agencies in Arequipa forecast for house prices in the next 12 to 24 months?
Property experts forecast continued moderate price increases of 5-10% annually for the next 12-24 months, driven by persistent demand, population growth, and economic expansion.
The consensus view suggests the seller's market conditions will continue through at least 2026, supported by Arequipa's strong economic fundamentals.
Upside potential exists if major new infrastructure or mining projects accelerate, while downside risks include sharp interest rate increases or broader economic disruptions.
Most analysts expect the current market dynamics to persist, with supply constraints and demand growth maintaining upward pressure on property values.
It's something we develop in our Peru property pack.
How do rental yields in Arequipa compare with mortgage costs, and does that encourage buying or renting instead?
Average gross rental yields in Arequipa remain stable at 5.99%, providing attractive returns for property investors.
Monthly mortgage payments at current 7.44% interest rates are significantly higher than typical rental costs for similar properties, making renting more affordable in the short term.
For investors, yields remain attractive despite high purchase costs and rising rates, though some buyers are considering renting due to substantial down payment requirements.
Local buyers with secure employment and savings still favor purchasing for long-term wealth building, as property inflation continues outpacing rent increases.
The rent-versus-buy calculation favors renting for short-term residents but supports buying for those committed to long-term residence in Arequipa.
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.
The Arequipa housing market shows strong fundamentals supporting continued price appreciation through 2025-2026.
Current supply shortages, population growth, and economic expansion create conditions that make significant price declines unlikely in the near term.