2024 marked a period of recovery and dynamism in the residential real estate market. Home sales grew around 20%, according to the Association of Real Estate Companies of Peru (ASEI). José Espantoso, president of ASEI, explained that this growth was driven by the improvement of formal employment and the reduction of mortgage interest rates.
“This encourages more people to have access to housing,” Espantoso highlighted to Perú21. In addition, he noted that the housing supply during the year reached 40,000 units.
An analysis by the Central Reserve Bank (BCR) reveals that another key factor behind this dynamism was the evolution of real estate prices. During 2024, the values of apartments for sale showed a general downward trend.
How does the BCR measure the evolution of the price per square meter? To evaluate the evolution of prices, the BCR constructs an indicator based on the weighted average of the median price per square meter of apartments for sale in Metropolitan Lima. This analysis considers variables such as the age of the property, its location, size, number of rooms and other characteristics.
Furthermore, with the objective of eliminating the effect of inflation, the indicator presents the values in constant 2009 soles. In addition, it classifies the districts according to the income level of their residents into two groups: high income and medium income.
High income districts
According to the BCR indicator, the average price per square meter in high-income districts reached US$1,934 at the end of the third quarter of 2024. This represents a drop of 1.9% compared to the fourth quarter of 2023, when it was located in US $1,972.
And if adjusted for inflation, the drop is more pronounced. At constant prices, the value of the square meter in these districts decreased 4.5%, reaching S/4,421 (in 2009 soles).
The BCR includes districts such as Barranco, La Molina, Miraflores, San Borja, San Isidro and Surco in this group. According to the monetary authority, San Isidro and Barranco present greater dispersion in apartment prices, due to the variability in the characteristics of the properties.
Middle income districts
On the other hand, the average price per square meter in the middle-income districts, which include Jesús María, Lince, Magdalena, Pueblo Libre, San Miguel and Surquillo, showed a slight increase of 0.24% in dollars as of the third quarter of 2024, compared with the fourth quarter of 2023.
However, in constant soles, prices in these districts fell 2.44% in the same period.
“As a conclusion, it would indicate that prices remain stable with small positive or negative variations,” said Ricardo Arbulú, general manager of Ciudaris.
Real estate bubble ruled out
Regarding the possibility that the Peruvian residential real estate market is experiencing a real estate bubble, the president of ASEI ruled out this possibility. Espantoso indicated that the fundamentals of the real estate market are very solid, the demand for housing is strong and there is room to continue developing affordable housing.
According to the BCR, if the prices of the third quarter of 2024 are compared with the third quarter of 2019, prior to the pandemic, the price in dollars per square meter in apartments in middle-income districts rose 4.8%, while in those of high income fell 0.23%. However, at constant prices, the values fell 5.3% and 9.8%, respectively.
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