Housing Demand Returning to Peru

Key Highlights

• Optimism coming back to Peruvian economy after pandemic and political upheavals
• Housing demand returning in Lima and in more rural settings

Peru’s Rural Housing Market Tells Its Own Stories

Into Peru’s mountains and rural regions, the real estate market is “…the Wild West in a lot of ways…” said Roxana Jave, managing broker of Live in Peru Lifestyle Properties.

Jave said, “This is the Peru that foreigners are interested in. You’re off the grid but not so far off that you can’t get the essentials.”

In western Peru, a seven-hour drive from Lima  (the country’s capital city) and 12,000 feet above sea level at the base of the Cordillera Blanca mountain range, there are limitless and unending views of the mountains.

The town of Huaraz, home to some 120,000 residents and capital of Peru’s Ancash region, sits at the boundary of Huascaran National Park, one of the world’ most popular climbing and hiking destinations.

Prices range from $70 to $110/square foot in Huaraz.  Farther out into the mountains, undeveloped lots with a road and access to power generally run about $11/square foot.

Lima Tells Other Stories

Lima, Peru’s capital city and home to some 10M residents, was essentially wiped clean of foreign buyers and expats at the beginning of the pandemic. Although COVID didn’t hit Peru’s real estate industry as hard as it hit other local industries, foreign buyer and investment interest evaporated.

Now, however, housing demand in the capital is returning.  Miguel Barragan, a broker and owner of RE/Max Royalin Lima, said, “The economy is expected to grow +10% in 2021, and demand for real estate will rise with it.”

According to Properati,an Argentinian-based listing site that covers much of South America (Peru as a whole has no Multiple Listings Service), buyers want larger spaces (55% of properties sold in 2020 had three bedrooms), good ventilation, balconies and gardens.  Sales of beachside properties saw an uptick of 25% in October and November in 2020. That percentage uptick increased during Q1 2021.

Lima’s Prices

The Association of Real Estate Companies of Peru (ASEI) reported that metro Lima’s prices as of Q1 2021 increased +5% y/y to approximately $154/square foot.

The more expensive apartments in Lima (2,500 – 6,500 square feet) usually go up to $560/square foot.  Amenities for these units typically include a terrace, storage, free parking and ocean views.

Buying Basics in Peru’s Urban and Rural Settings

American and Canadian buyers have long dominated in metro Lima.  A more eclectic mix of buyers from America, Canada, Asia, Europe, Chile and Columbia buyers are drawn to the mountains.  Though foreign interest and referrals dropped off substantially during the pandemic, Barragan anticipates much more activity in 2021.

Foreign buyers are encouraged to get an assessment of the property by a real estate agent or lawyer.  Cash deals are most common as loans from foreign banks are not accepted.

Thanks to The New York Times. 

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