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Chilean house prices are currently stabilizing after years of strong growth, with real prices nearly flat in 2025.
The residential property market has shifted from the rapid price increases of 2021-2022 to a more moderate phase, influenced by higher mortgage rates, elevated unemployment, and construction slowdowns that are constraining housing supply.
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Chilean house prices are expected to grow moderately at 2-4% annually over the next two years, with regional variations and supply constraints supporting price stability despite affordability pressures.
The market shows signs of stabilization rather than decline, with construction at decade-low levels and foreign investment recovering after recent policy uncertainties.
| Market Indicator | Current Status (2025) | Trend Direction |
|---|---|---|
| Average House Price | US$270,000 (+3.28% YoY) | Moderate growth |
| Santiago Price per mĀ² | US$2,300-$2,500 | Stable |
| Mortgage Interest Rate | 4.39% | Stabilizing |
| Construction Permits | 49,542 units (-31.8% YoY) | Sharp decline |
| Unemployment Rate | 8.9% | Rising |
| Inflation Rate | 4.3% | Above target |
| Rental Yields (Santiago) | 4.64-5.11% | Stable |
What have been the average house price trends in Chile over the past 10 years?
Chilean residential property prices have demonstrated consistent upward momentum over the past decade, with average annual growth rates of 4.2-4.5%.
The most dramatic price surge occurred during the pandemic period, with house prices jumping 13.9% year-over-year in 2021, followed by an even stronger 18.4% increase in 2022. These exceptional gains reflected a combination of low interest rates, increased savings, and supply chain disruptions affecting construction.
However, the market dynamics shifted significantly from 2023 onwards. While nominal prices continued to rise at 2.3% year-over-year in Q3 2024, inflation-adjusted real prices actually declined by 1.7%, indicating that the rapid appreciation phase has ended.
The peak pricing period was clearly 2021-2022, after which the Chilean residential market entered a stabilization phase that continues through 2025. This pattern reflects the broader economic adjustments following pandemic-era monetary policies.
What is the current average house price in Chile compared to last year?
As of June 2025, the average house price in Chile stands at approximately US$270,000, representing a modest 3.28% increase compared to the previous year.
In Santiago, the country's primary real estate market, average prices per square meter range between US$2,300 and US$2,500. However, the national picture shows more complex dynamics, with prices falling 0.7% year-over-year as of June 2025 when measured across all regions.
This apparent contradiction between rising average prices and falling national prices reflects geographic concentration of higher-value transactions in Santiago and other major urban centers, while smaller markets experience price softening.
Sales volumes have declined significantly by about 15% year-over-year in 2024, indicating reduced market activity despite relatively stable pricing. This suggests buyers are adopting a more cautious approach rather than aggressive bidding that characterized the 2021-2022 period.
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How much has housing supply changed in Chile over the past 12 months?
Housing supply in Chile has contracted dramatically over the past 12 months, with new dwelling permits dropping 31.8% year-over-year to just 49,542 units in the first ten months of 2024.
Construction activity has fallen to levels not seen since 2010, with real estate investment projected to decline 6.4% in 2024. The total stock of dwellings available for sale decreased 1.5% from the previous year to 104,877 units in Q3 2024.
This supply constraint represents one of the most significant factors supporting current price levels, as demand continues to face limited inventory. The construction industry is experiencing multiple challenges including higher material costs, labor shortages, and financing difficulties.
While a moderate recovery in construction is anticipated for 2025, the current supply shortage is expected to persist in the near term, creating underlying support for property values despite other economic headwinds.
How many new residential construction projects are planned or underway in Chile right now?
The Chilean government has set ambitious targets of 100,000 to 120,000 new homes per year as part of the 2025 national budget, but current construction activity falls dramatically short of these goals.
Permit activity reached critically low levels in July 2024, with only 2,966 new homes permittedāa staggering 76.7% drop versus 2023 and representing the lowest monthly figure in a decade.
This massive reduction in new project approvals reflects broader challenges facing the construction sector, including elevated financing costs, regulatory uncertainties, and economic headwinds affecting developer confidence.
Despite government intentions to address the housing deficit affecting approximately 1 million Chilean families, the gap between policy targets and actual construction starts continues to widen, suggesting supply constraints will persist well into 2025 and beyond.
What is the current mortgage interest rate in Chile and how does it compare to the past five years?
The current mortgage interest rate in Chile stands at 4.39% as of June 2025, representing a moderate level compared to recent historical extremes.
To understand this rate in context, Chilean mortgage rates experienced dramatic swings over the past five years. Rates hit a record low of 1.99% in 2019 during accommodative monetary policy, then surged to over 6% in 2022-2023 as the Central Bank aggressively fought inflation.
The current 4.39% rate reflects a stabilization phase as inflation pressures have moderated from their peaks, though rates remain well above the ultra-low levels that fueled the 2021-2022 property boom.
This rate level is generally considered manageable for qualified borrowers but represents a significant affordability challenge compared to the sub-2% rates available just a few years ago, contributing to reduced buyer activity in the residential market.
How have unemployment rates and average household incomes in Chile changed recently?
Chile's unemployment rate has risen to 8.9% as of June 2025, up from 8.3% a year earlier, reflecting continued weakness in the labor market with sluggish job creation across most sectors.
Average monthly salaries in Chile currently stand at 1,850,000 CLP (approximately US$1,917), while household disposable income per capita is projected at around US$9,570 for 2025.
Real wage growth is showing signs of recovery, but consumer sentiment remains mixed due to persistent inflation and employment uncertainty. The elevated unemployment rate, well above Chile's historical average, continues to pressure household purchasing power.
These labor market conditions directly impact real estate demand, as potential buyers face both higher borrowing costs and greater employment uncertainty, contributing to the reduced sales volumes observed across the residential property market.
What are the latest official inflation rates in Chile, and how are they affecting real estate affordability?
Chile's annual inflation rate reached 4.3% in July 2025, rising from 4.1% in June and remaining persistently above the Central Bank's target range of 2-4%.
This elevated inflation directly undermines real estate affordability by eroding purchasing power faster than wage growth can compensate. The house price-to-income ratio has reached 11.4 as of 2024, indicating that properties are expensive relative to typical household earnings.
Inflation affects real estate markets through multiple channels: it reduces the real value of savings available for down payments, increases construction costs that get passed through to buyers, and maintains pressure for higher interest rates that increase mortgage payments.
The persistence of above-target inflation suggests that affordability pressures will continue to constrain buyer demand, particularly among first-time purchasers and middle-income households seeking to enter the residential property market.
How many homes are currently on the market compared to the same time last year?
The housing inventory available for sale in Chile has declined slightly by 1.5% year-over-year as of Q3 2024, with current nationwide stock totaling 104,877 units.
However, this modest inventory decline masks important changes in market dynamics. The average time to sell properties has increased significantly, with inventory turnover now averaging 30.1 months nationwideālonger than the previous year.
This combination of slightly lower inventory but longer selling times indicates a market that is neither severely supply-constrained nor experiencing rapid clearance of available properties. Instead, it suggests a more selective buyer environment where properties must be competitively priced to attract offers.
The slower inventory turnover reflects the broader market adjustment as buyers become more cautious due to higher mortgage rates and economic uncertainty, while sellers maintain price expectations based on recent peak valuations.
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What is the current rental yield in major Chilean cities, and how has it been trending?
| City | Average Gross Rental Yield (Q3 2025) | Market Characteristics |
|---|---|---|
| Santiago | 4.64-5.11% | Stable yields, largest rental market |
| Antofagasta | 6.13-6.38% | Top performing mining area |
| ConcepciĆ³n | 5.61% | Strong university and industrial demand |
| Temuco | 4.9-5.6% | Healthy yields in regional center |
| ViƱa del Mar | 3.94% | Premium coastal market, lower yields |
Rental yields across major Chilean cities have remained generally stable, with notable regional variations that reflect local economic conditions and housing supply-demand dynamics.
Mining regions like Antofagasta continue to deliver the highest yields due to strong employment in resource sectors and limited housing supply. Mid-sized cities such as ConcepciĆ³n and Temuco offer attractive risk-adjusted returns for rental investors.
Santiago yields reflect the capital's mature market dynamics, while coastal areas like ViƱa del Mar show lower yields due to higher property prices driven by lifestyle and tourism factors.
How have foreign investment levels in Chilean real estate changed over the past two years?
Foreign direct investment in Chile reached US$17.76 billion for January-September 2024, making it the third-highest FDI year in the past decade, with significant real estate investment flows contributing to this total.
The 2022-2023 period saw policy uncertainty impact FDI levels, particularly around constitutional reform discussions and proposed changes to foreign investment frameworks. However, constitutional clarity and market reforms have renewed investor confidence throughout 2024.
Recent government proposals to restrict tax exemptions for foreign buyers may slow future FDI inflows into residential real estate, though the full impact of these potential policy changes remains to be determined.
Overall, foreign investment has recovered from its 2022-2023 lows, but faces new regulatory headwinds that could moderate growth in the residential property sector specifically, even as other sectors continue attracting international capital.
It's something we develop in our Chile property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Chile 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 government policies, subsidies, or tax changes affecting real estate are expected in the next 12 months?
Several significant policy changes are scheduled to impact the Chilean real estate market over the next 12 months, with tax reforms representing the most substantial shifts.
Tax reform proposals for 2025 include limiting the tax exemption on real estate sales to the first 8,000 UF (approximately CLP 313 million) and restricting rental income exemptions, potentially affecting both domestic and foreign real estate investors.
New energy efficiency requirements will mandate "CEV" energy rating certifications for all new homes starting October 2025, adding compliance costs but potentially improving long-term property values through enhanced energy performance.
Government subsidies for low-income buyers continue, providing US$2,700-$4,500 per home to eligible purchasers, though these programs address only a small portion of the overall housing deficit.
These policy changes suggest a government approach balancing revenue generation through tax reforms with continued support for homeownership among lower-income segments, while introducing energy efficiency standards that align with global sustainability trends.
What do major banks and real estate analysts forecast for Chilean house prices over the next two years?
Major banks and real estate analysts project moderate house price growth of 2-4% annually for 2025-2026, representing a significant deceleration from the rapid appreciation experienced in 2021-2022.
Santiago, mining regions, and high-demand urban zones are expected to outperform the national average due to stronger local economies and continued population growth, while coastal and southern areas may experience slower price appreciation.
Supply constraints from reduced construction activity provide underlying support for prices, but analysts note that affordability pressures and demand-side economic headwinds may cap growth potential.
The consensus view among market professionals suggests price stability rather than decline, with regional variations becoming more pronounced as different areas respond to local economic conditions and employment opportunities.
This cautious optimism reflects expectations that the Chilean residential market has largely completed its post-pandemic adjustment and is entering a more sustainable growth phase aligned with fundamental economic indicators.
It's something we develop in our Chile 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.
Chilean house prices are unlikely to experience significant declines over the next two years, with analysts projecting modest growth of 2-4% annually despite ongoing economic challenges.
The combination of severely constrained housing supply, stable rental yields, and recovering foreign investment provides underlying market support, even as affordability pressures and higher mortgage rates moderate buyer demand.
Sources
- CEIC Data - Chile House Prices Growth
- Aparthotel - Chile Real Estate Analysis
- The LatinVestor - Chile Price Forecasts
- Global Property Guide - Chile Price History
- US Trade.gov - Chile Housing Construction
- The Global Economy - Chile Mortgage Rates
- Trading Economics - Chile Unemployment
- Trading Economics - Chile Inflation
- Global Property Guide - Chile Rental Yields
- Santander Trade - Chile Foreign Investment