Peru: Price History

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Peru's housing market slowly recovering

Lima (pop. 8.2 million) continues to see much construction of new apartment buildings in residential areas.

There is the traditional elite Miraflores area, which has high priced apartments with magnificent sea views. For the most exclusive buyers there is the San Isidro district. There is also Barranco in the Los Malecones area.

Further from the centre, the Surco area has a large number of good-quality apartment blocks, and is well-administered so that values tend to be well-maintained. Within Surco, agreeable areas are Las Casuarinas, Chacarilla del Estanque, San Jorge, Santa Teresa and parts of Valle Hermoso. For detached housing Surco is also interesting, as is San Borja.

Reviving the housing sector

To revive the housing sector, the government launched several housing projects such as MiCasa, MiVivienda, Techo Proprio, and MiCasita. Micasa provides loans for the renovation of specific segments of the house such as converting wooden walls to brick, replacing zinc roofs or adding additional rooms, one at a time.

Fondo MiVivienda was established in 1999. Mivivienda housing loans are especially created for the middle and upper class levels (A, B and C). MiCasita, on the other hand, targets middle to low-income segments. It is a full service mortgage financing company catering to first-time borrowers.

Techo Propio is a program directed at family groups who do not have their own houses and have never received State support to build or buy one. The total income a household earns should not be more than 1,450 Peruvian Nuevo Sols (PEN) (classes D and E).

Techo Propio offers loans for purchasing houses up to US$12,000, while Fondo MiVivienda provides mortgages up to US$30,000.

The housing market

Of the 7.2 million housing units in Peru in 2005, a total of 5.8 million residences are permanently occupied, according to INEI (National Institute for Statistics and Informatics). About 71% of these houses are owned, either on credit or fully paid. Owner-occupancy for urban areas in 2004 was at 73.9%.

Rented houses, on the other hand, comprise 13% of the total number of occupied housing units. Houses either provided by companies or by other institutions make up 6.7%, while 2.2% are acquired in other ways.

Economic growth yet to be felt

Peru has the highest GDP per capita growth in Latin America at 3.81% from 2001 to 2006. In 2006 alone, its GDP per capita increased by 4.5% to US$3,151. However, almost half of the population still lives in poverty. More than 300,000 households in the urban areas are owned by invasion or squatting.

Peru has a population of more than 26 million, 74% of which live in the urban areas. The number of people in Lima alone exceeds 7 million.

President Alan Garcia promised public investment spending of one billion per year, prioritizing roads, schools, and health facilities. Money is not a problem, and millions worth of projects have been approved. However, local officials are causing roadblocks to the investments.

Peru - more data and information

• Peruvian house prices, rents, and letting income - real data!
• How expensive are houses in Peru, compared to the rest of Latin America?
• How much rent can be earned from Peru property, compared to the rest of Latin America?

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posted by Edda Broderick | 2007-08-22

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