Published on and written by Cyril Jarnias
Long fueled by mining and fishing, Peru is now discovering how profoundly tourism is reshaping its urban landscape, its beaches, and even its Amazonian forests. Beyond the postcard images of Machu Picchu at sunrise, another story is unfolding: that of a real estate market increasingly dependent on visitor flows, short-term rental platforms, and transnational investments. This entanglement of tourism and real estate interests opens up significant opportunities but also poses risks to housing access and the social balance of many cities.
A Booming Real Estate Market in a Tourism-Driven Country
The Peruvian real estate market is emerging from a decade of almost continuous growth, fueled by rapid urbanization, an expanding middle class, and a relatively stable macroeconomic framework. The country has 33.7 million inhabitants, nearly 79% of whom live in cities, and construction accounts for about 5.4% of GDP. Lima concentrates the largest share of activity, with a metropolitan area projected to reach 11.67 million inhabitants by 2026.
The economy’s GDP is close to 250 billion dollars.
In this context, tourism holds a strategic place. It is now the third-largest sector of the economy after fishing and mining, contributing about 7% to GDP and up to 11% of employment when direct and indirect jobs are combined. The World Travel and Tourism Council estimates the sector will be worth over 23 billion dollars in 2025, or nearly 7.8% of the national economy, and could reach 34.3 billion by 2035.
After collapsing to 444,000 international visitors in 2021, the country welcomed 3.26 million foreign tourists in 2024, a 29.37% year-on-year increase. Projections forecast about 3.6 million arrivals in 2025, with a possible return to pre-2019 levels (5.28 million) by 2026. Meanwhile, domestic tourism is experiencing strong growth: 43.5 million internal trips in 2024 and over 48 million expected soon.
In such an environment, it is not surprising that real estate has become heavily reliant on tourism dynamics, to the point that some regions now see their local markets evolving according to the rhythm of peak tourist seasons.
How Tourism is Transforming Real Estate Demand
The first visible consequence of the tourism boom is the explosion in demand for short-term housing: furnished apartments, beach houses, Amazon lodges, urban studios in Lima’s trendy neighborhoods or the historic center of Cusco.
Average gross rental yield nationwide for residential property in the last available quarter.
Tourism, Prices, and Yields: A Powerful but Uneven Cocktail
Between 2015 and 2025, real estate prices increased on average by 3% to 7% per year nationwide, with a notable outperformance in Lima, where home values have nearly doubled since 2015 and rose by about 10% in 2024–2025, up to 19% in some premium neighborhoods. This rise in values has mechanically compressed rental yields: from 13% in 2009, they have fallen to around 6–7% in major cities.
Despite a generally difficult context, Peru’s most sought-after tourist areas (like the historic center of Cusco, Lima’s Miraflores, Barranco, and San Isidro neighborhoods, the northern beaches, and resorts like Asia) continue to offer attractive performance for investors seeking high seasonal income.
In these territories, tourism acts as a multiplier: it stimulates demand for short-term rentals, increases the value of well-located properties, and attracts foreign capital or Peruvian diaspora money. But this dynamic is not without its drawbacks: it intensifies pressure on housing access for local residents, promotes the financialization of housing, and in some cases, contributes to the gentrification of historically popular neighborhoods.
Lima: Economic Capital, Tourist Showcase, and Short-Term Rental Laboratory
Lima remains the country’s economic and real estate heart and is playing an increasingly central role in the tourism economy: a gateway port city, a major air hub, and a gastronomic capital, it attracts international tourists, business travelers, and a growing number of digital nomads.
A Real Estate Market Fueled by Urban Demand… and by Airbnb
In 2024, the Association of Real Estate Companies (ASEI) recorded a 30% growth in the residential market, with 21,479 units sold and 4,900 new homes launched. In the metropolitan area, over 12,000 units were sold in the first half of 2025, primarily in the social and middle-income housing (VIS) segment.
At the same time, Lima has become the country’s primary short-term rental market. According to various databases, the metropolis had between 12,000 and 15,000 active listings on Airbnb between 2024 and late 2025. The typical configuration: a one or two-bedroom apartment, fully privatized (over 80% of listings), accommodating an average of 3.5 travelers.
The figures summarize the dynamics well:
| Indicator (Lima, Airbnb market) | Indicative Value |
|---|---|
| Number of active listings | 12,000 to 15,000 |
| Median occupancy rate | ≈ 54% |
| Nights booked per year (typical) | ≈ 197 |
| Average daily rate | ≈ $42 (PEN 158) |
| Average gross monthly income | ≈ $728 |
| Average gross rental yield | ≈ 6.45% |
Comparing this data to long-term rents (about $850 per month for an average 100 m²), it is clear that seasonal rentals generate, at equivalent fixed costs, gross revenues 20 to 40% higher, at the price of more demanding management and heavier expenses.
Investors are particularly attracted by this differential, especially since the regulatory framework remains relatively permissive: municipal permits are sometimes required, and compliance with condominium regulations is necessary, but no strict national moratorium is in place at this stage.
Miraflores, Barranco, San Isidro: When Tourism Restructures Neighborhoods
Three neighborhoods illustrate this profound transformation of the link between tourism and real estate in Lima.
In Miraflores, a highly touristic coastal neighborhood, short-term accommodations show an occupancy rate of about 65% and an average nightly rate of $47, translating to nearly $905 in average gross monthly income, for long-term market rents already among the highest in the country ($9 to $12 per m² per month). The neighborhood combines hotels, gourmet restaurants, and a stock of studios and small apartments heavily intended for rental investment.
The occupancy rate for rentals in the bohemian Barranco neighborhood, where monthly revenues range between $700 and $900.
San Isidro, the capital’s financial heart, has established itself as a destination for high-end business tourism. Nightly rates there often exceed $50 and monthly revenues can surpass $1,000 per property, catering to executives on assignment and conference attendees, bolstered by the development of the Lima Convention Center and the future “financial district” of Las Begonias.
These dynamics result in marked increases in price per square meter, a decrease in the average size of units (studios and one-bedrooms dominate new developments), and a rise of “para-hotel” accommodation at the expense of traditional hotels.
Opportunities and Tensions: The Flip Side of the Coin
The rise of tourist rentals has provided additional income for many households and accelerated the renovation of older housing stock. Municipal programs like “San Borja + Verde” or “Techo y Muro Verde” in Barranco, which reward the installation of green roofs and walls, show that local authorities are seeking to combine real estate attractiveness, tourism, and sustainability.
The development of tourism, especially via seasonal rentals, can lead to negative effects: a scarcity of long-term housing supply, rising sale prices and rents, land speculation, and tensions with residents (noise, traffic, a feeling of the “museification” of city centers). This process, called “touristification” or “tourist gentrification,” reconfigures urban space in favor of visitors, sometimes to the detriment of local communities.
Lima is not immune to these tensions, even though the public debate there remains less conflictual than in cities like Barcelona or Lisbon. The central question then becomes: how to benefit from tourist revenue without sacrificing the right to housing in the most attractive neighborhoods?
Cusco: The Andean Laboratory Where Tourism Dictates Property Value
Cusco embodies the classic example of a city whose real estate destiny is closely tied to tourist traffic. The former Inca capital, a colonial city listed as a UNESCO World Heritage site, is the main gateway to Machu Picchu and the Sacred Valley.
An Economy and Real Estate Market Ultra-Dependent on Visitors
Before the pandemic, Machu Picchu welcomed nearly 1.5 million visitors per year, and still about 950,000 in 2023. In 2024, bookings are said to have exceeded pre-crisis peaks by 22%, foreshadowing a new wave of pressure on accommodation demand.
Cusco’s figures reflect this dependence: advertised rental yields for properties targeting the tourist market range between 6% and 9% for classic rentals, and can climb to 8–12% for short-term rentals, particularly in the historic center, the San Blas neighborhood, or near major tourist arteries. Foreign investors – notably retirees from North America, Spain, or the United Kingdom – as well as the Peruvian diaspora see this as an opportunity for portfolio diversification.
The price per square meter for heritage properties in Cusco typically ranges from 3,000 to 6,000 Peruvian soles.
Seasonality, Yield, and Vulnerability
The high season, from June to October, concentrates a disproportionate share of revenue. During this period, daily rental rates can be three to four times higher than those of a long-term lease. Tourist rentals are occupied on average more than 190 nights per year, with occupancy rates around 50%–55%. This profile is attractive on paper but makes investors highly sensitive to shocks: strikes, road blockades, protests, or temporary closures of Machu Picchu as occurred during the pandemic.
A delay in opening the new Chinchero International Airport or a suspension of railway links illustrates how even a slight deterioration in accessibility can immediately reduce rental income and, over time, depreciate the perceived value of real estate assets in the region.
Despite this volatility, projections anticipate an annual price increase of 3% to 5%, driven by the normalization of tourism and the arrival of new visitor profiles: digital nomads attracted to historic neighborhoods, high-end tourists seeking immersive cultural experiences, or hikers exploring alternative routes to the Inca Trail.
Between Opportunity and Social Pressure
The influx of capital has enabled the rehabilitation of old buildings and created jobs in construction, property management, and services. But it also drives up the cost of living for the local population in a city where average wages remain relatively low (about 1,425 soles per month according to some estimates), far from the sale prices of several hundred thousand soles for a small apartment.
The situation mirrors observations in other countries: the rise of second homes, speculative purchases, and tourist rentals can limit housing access for low-income households and accelerate the displacement of populations to the periphery or to less well-served neighborhoods.
Northern Beaches, Asia, and the Amazon: Tourism as the Engine of New Real Estate Frontiers
Beyond Lima and Cusco, tourism is drawing a new Peruvian real estate geography. Several areas see their local markets structured around beach or eco-tourism traffic.
Máncora, Punta Sal, Paracas, Asia: The Rush to the Sea
The northern beaches, led by Máncora and Punta Sal, have benefited for several years from growing enthusiasm, both from Peruvians and foreign visitors seeking year-round sun. Máncora, for example, is among the country’s best short-term rental markets, with an average monthly income exceeding $1,100 and an average daily rate above $150 during certain periods.
Gross monthly revenues generated by high-end rentals in Asia during peak season.
Paracas, a coastal destination near Lima and the gateway to the eponymous national reserve, is on an upscale trajectory, with a proliferation of resorts, second homes, and apartments put up for short-term rental.
In these areas, the combination of increased accessibility (roads, potential future railway lines), targeted tourism marketing, and land availability is sparking a true “residential touristification,” where the boundary between a seaside resort and a residential town becomes blurred.
The Amazon and Iquitos: The Wave of Eco-Tourism Real Estate
In the Amazon region, the city of Iquitos – which already received over 740,000 tourists in 2019, more than its population – is seeing the development of a real estate market closely linked to eco-tourism. Prices per square meter remain lower than in Lima or Cusco (between 2,000 and 4,500 soles), but projected rental yields for sustainable lodges and accommodations range from 5% to 9% depending on the format (long or short term).
Over 34 eco-lodges have opened in the Amazon basin since 2022, encouraged by the government for community or low-impact projects.
Tourism, Short-Term Rentals, and the Financialization of Housing
One of the striking features of the current transformation of the Peruvian market is the spectacular rise of short-term rentals, which turn homes into financial assets indexed to tourist seasons. This phenomenon is not limited to Lima or Cusco: intermediate cities like Arequipa, Trujillo, Ica, Huaraz, Puno, or Urubamba are among the main Airbnb markets nationwide.
A Tourist Rent Economy
On average in Peru, seasonal rentals generate revenues about twice as high as those from a classic rental, once adjusted for occupancy rates. In Lima, the average gross annual income per Airbnb listing is around $8,000, with nights sold at an average of $42 and a 54% occupancy rate.
Average monthly revenue in the summer of 2025 in the Asia resort area, compared to an $800 annual average.
This yield differential incentivizes thousands of property owners – small landlords and institutional investors alike – to direct their properties toward the tourist market rather than long-term rental. The cumulative effect can reduce the available supply for resident households and contribute to rising rents in the most attractive neighborhoods.
A Regulatory Framework Still Under Construction
In Peru, the regulation of short-term rentals remains primarily the responsibility of municipalities. Some, like Cusco, already require registration with regional tourism authorities, conduct annual inspections, and apply lodging taxes. Other cities are more lax, which encourages the proliferation of sometimes informal offerings.
Condominium regulations vary regarding short-term rentals: some explicitly prohibit it, others allow it under conditions. This situation reflects a balance being sought between tourism revenue, the right to housing, and quality of life in neighborhoods.
However, the international trend shows that many highly touristic destinations (Barcelona, Hawaii, U.S. coastal cities, etc.) end up strengthening their regulation in the face of effects on housing prices and availability for local workers. Peru could face similar trade-offs if real estate pressure continues to rise in tourist areas.
Major Tourism Infrastructure Projects as Real Estate Catalysts
The Peruvian state has embarked on an ambitious tourism investment strategy through public-private partnerships. Over $1.26 billion in specifically tourism-related projects are scheduled between 2025 and 2027, of which 92% are via PPPs, and nearly $580 million is dedicated to modernizing airports, railway lines, and eco-lodges.
Airports, Trains, and Roads: Bringing Territories Closer to Markets
Several flagship projects are particularly structuring for the relationship between tourism and real estate:
| Project | Estimated Investment | Main Tourism Impact |
|---|---|---|
| New Chinchero International Airport (Cusco) | ≈ $550 M | Capacity > 8 M passengers/year, strengthens Cusco as an Andean hub |
| New Jorge Chávez Terminal (Lima) | + Costa del Sol (2 hotels) for $60 M | Creation of an “airport city” with a strong hotel and commercial component |
| “Third Group of Airports” Project | $550 M | Improved accessibility for several tourist regions |
| Choquequirao Cable Car | $265 M | Access reduced from 2 days to 20 min, projected increase in visitor numbers |
| Modernization of railways to the Sacred Valley | ≈ $580 M (in the global plan) | Cusco–Machu Picchu travel time reduced by 40% |
| Andean Longitudinal Corridor (Section 4) | $1,582 M | Rehabilitation of 965 km of roads, opening up tourism and commerce |
Peruvian and international experience shows that this type of infrastructure almost systematically leads to a revaluation of land in the served areas. Around the new stations of the Lima Metro, prices are said to have already risen by 15% to 20% within a one-kilometer radius. Similar effects can be anticipated around the future Chinchero airport, new railway links to the coast, or improved access to relatively preserved sites like Choquequirao.
International Hospitality and Urban Recomposition
The arrival of major international chains in the country reflects renewed confidence in Peru’s tourism potential. Six new hotels from prestigious brands are set to open, five in Lima and one in Tumbes (northern border region and gateway to the beaches). The Costa del Sol group is investing $60 million in two establishments within the future “airport city” of Jorge Chávez, while Accor is deploying $25.5 million in a seafront Novotel in Punta Sal.
New hotels generate housing demand for their employees, stimulate the opening of local businesses, and often attract secondary residences or office buildings, thus promoting mixed urban development.
The Investment Framework: Openness to Foreign Capital and Specific Taxation
Peru stands out in the region for a framework relatively open to foreign investment. The Constitution grants non-residents the same rights as citizens for purchasing real estate, except for a 50 km strip along land borders, where a special decree is required.
Peru has an institutional and fiscal framework favorable to foreign investment. The ProInversión agency facilitates project promotion, while a network of treaties (free trade, non-double taxation) secures operations. In the real estate sector, vehicles like FIRBI and FIBRA offer tax advantages until 2026, including a reduced tax rate of 5% on certain income distributed to individuals.
For non-residents buying a property for tourist rental, the tax framework is however heavier: gross rental income is taxed at 30%, as are capital gains upon resale, while rents are subject to VAT (18%). Transactions, often denominated in dollars, incur fees of 4% to 6.5% (transfer taxes, notary, registration, legal fees), and risks related to property titles (lack of a centralized, harmonized land registry, fraud, unpermitted constructions) require thorough due diligence.
Despite these constraints, the weakening of the Peruvian sol against the dollar in recent years has made domestic assets relatively cheap for foreign buyers, especially in segments oriented toward the tourist clientele.
Between Tourism Growth and the Right to Housing: The Challenge of Balance
Available data converge on a clear observation: highly specialized tourist destinations see their real estate markets evolve faster than the rest of the country, both in terms of prices and the composition of the housing stock (more small units, more second homes, more seasonal rentals). This movement creates economic opportunities but also imbalances.
Housing Access: A Structural Tension Exacerbated by Tourism
Peru already faces a deficit of about 2 million homes, which grows by 142,000 units per year, while only 90,000 formal units are built each year. In Lima, the deficit exceeded 600,000 homes in 2016, and cities like Arequipa today lack 55,000 units, with urban growth of 6% per year.
Tourism revenue accounts for nearly 7.8% of Peru’s GDP.
Still Highly Segmented Public Policies
Facing the housing shortage, the state has implemented a range of dedicated programs: MiVivienda for the middle and upper-middle class (loans up to $30,000 for properties between 57,500 and 479,300 soles), Techo Propio for homeless families (subsidies up to 46,545 soles for purchase, 32,100 soles for construction, 12,305 soles for improvement), as well as Micasa Más, Mi Construcción, MiTerreno. A $300 million loan from the Inter-American Development Bank also supports the production of green and efficient housing, targeting over 17,000 households.
These instruments address the housing question from a social and class-based logic, but do little to address the “tourist” dimension of urban and regional markets. In other words, housing policy and tourism policy remain largely parallel, without a true integrated framework to manage the interfaces: regulation of short-term rentals, taxation of second homes, protective zoning for residents, etc.
The experience of other highly touristic countries shows that a lack of coordination can lead to conflicts between residents and visitors, a feeling of “invasion,” protests against the rising cost of living, and a sudden tightening of regulations after years of laissez-faire.
Positive Signals from Community and Sustainable Tourism
Nevertheless, Peru is a pioneer in some areas that could limit the negative effects of tourism on real estate. Over 200 community tourism projects are active, generating about 40% of the income for participating households and helping to preserve 18 endangered artisan traditions. These initiatives often involve locally managed accommodations, anchored in communities, which value culture without completely disconnecting living space from its residential function.
In the hospitality sector, more than 220 companies are certified by a national green certification program, with 74% of certified hotels practicing zero-waste kitchens, and 58 adventure operators adopting carbon-neutral transport. In cities, programs for green roofs or incentives for earthquake-resistant construction illustrate an effort to reconcile attractiveness, resilience, and quality of life.
These approaches show that it is possible to think together tourism, real estate, and sustainability, provided we move beyond a purely speculative logic to integrate explicit social and environmental objectives.
What Future for the Tourism–Real Estate Couple in Peru?
Everything indicates that Peru’s trajectory of tourism growth will continue: forecasting models (ARIMA, regressions) anticipate an annual progression of about 8% in the short term, with international revenues that could exceed 5 billion dollars as early as 2025 and nearly 9.4 billion by 2035. Domestic flows, already exceeding 40 million trips annually, are expected to continue increasing.
On the real estate side, demand remains robust in the middle and popular segments, and mortgage credit, still modest (6.3% of GDP), has significant development potential, even though interest rates fluctuate between 7% and 11% for twenty-year loans. Prices continue to rise moderately on average, with overheating limited to certain highly sought-after micro-markets.
Tourism is a powerful driver of land valorization, but it also represents a factor of vulnerability for housing if its effects are not managed. Three issues are decisive for the next decade.
Better Articulate Tourism Policies and Housing Policies
Authorities already have powerful tools – housing subsidies, a national infrastructure plan, real estate investment schemes – but these would benefit from being coordinated with tourist flow forecasts. For example, setting quotas for short-term rentals in neighborhoods with high housing deficits, regulating the establishment of second homes in sensitive areas, or reserving a portion of new developments for affordable housing in expanding destinations.
Preserve Social Mix in the Most Attractive Areas
In Lima as in Cusco or certain Andean villages, the challenge is not only economic but profoundly urban and social: how to prevent historic centers from becoming showcases for visitors, deserted by inhabitants? Mechanisms such as public pre-emption rights, community land trusts, or regulations inspired by international experiences (caps on nights, licenses, taxes dedicated to social housing) could be explored in a Peruvian context.
Making Tourism a Lever for Local Development Rather Than a Mere Rentier Market
Finally, the experience of community tourism projects, locally managed lodges in the Amazon, or municipal greening programs shows that tourism can contribute to developing territories in a more inclusive way, provided communities are involved in governance, a portion of the profits is redistributed toward housing and environmental policies, and there is resistance to the temptation of a pure and simple financialization of living space.
Peru, with its exceptional heritage and dynamic real estate market, is an example for studying how a country can balance tourism development and residents’ rights. The challenge is to integrate visitors and investors into a societal project that does not relegate residents to the background in their own territory.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
