Published on and written by Cyril Jarnias
Peru’s secondary home market has established itself in just a few years as one of the most dynamic in South America, despite a turbulent political context and an economy in an adjustment phase. Beyond the clichés of Machu Picchu, the northern beaches, and the Amazon, a real estate market is emerging where the secondary residence is no longer just a luxury for wealthy Limeños, but also a sought-after investment product for the middle class, the Peruvian diaspora, and a handful of foreigners in search of sun and yield.
This is the annual growth rate of Peru’s tourism sector, a key driver for the second home market.
A Generally Robust Real Estate Market, But in a Digestive Phase
Before zooming in on secondary homes, we must situate the general framework. Figures put forward by the Central Bank (BCRP) and real estate consultants paint a picture of a generally stable market, rather than an euphoric one. The hedonic price index advanced only 0.1% year-on-year in the third quarter of 2024 and, in real terms, prices declined by 1.7%. Quarter-over-quarter, the decrease reached 0.2% in nominal terms and 0.5% in real terms.
After a boom between 2010 and 2014 (annual increases of 12 to 15% in Lima), the market slowed, affected by the fall in copper prices, the pandemic, and political instability. Recently, growth has become sluggish: a 3% drop in 2021, a slight recovery to +1.6% in 2022 (but -6.3% in real terms), then +2.9% in 2023, remaining slightly negative in real terms after inflation.
At the same time, the economy has continued to diversify. With a GDP of about $250 billion, a GDP per capita close to $8,300, and inflation falling back to around 2%, the country maintains a macroeconomic profile deemed solid by rating agencies. Fitch anticipates average growth of 2.5% in the coming years, while the OECD projects 2.6 to 2.8%, and some more optimistic scenarios mention 3.5 to 4.5% per year until 2028. Construction, which represents about 5.4% of GDP, is expected to advance by around 3.8% in 2025.
For an investor targeting a second home, the current context indicates that price increases will likely not be explosive in the short term. However, solid fundamentals anchor a lasting demand: growing urbanization (76 to 79% urban population), a housing deficit close to 2 million units, and rapidly growing tourism. The recommended strategy is therefore more of a “long-term hold” than quick speculation.
Why Second Homes Are Gaining Ground
The second home segment does not have separate official statistics, but several trends converge. First, the massive housing deficit mainly concerns the primary residence of low-income households; meanwhile, a segment of the upper-middle class and high-income earners is turning to leisure or investment properties in coastal regions, Andean tourist towns, and certain Amazonian areas.
The pandemic accelerated remote work, affecting up to 40% of Peruvian workers, and stimulated a desire to settle in less densely populated areas. This includes beaches south (Asia, Punta Hermosa) and north (Máncora, Vichayito) of Lima, Andean valleys (Cusco, Sacred Valley), and cities like Arequipa. This trend adds to a growth in domestic tourism exceeding 25% over two years and an influx of foreign tourists, with nearly one million visitors to Machu Picchu in 2023 and over 2 million international tourists in the first eight months of 2024.
To these domestic drivers, we must add several categories of foreign buyers: North American retirees, Spaniards, British, regional investors, and especially the Peruvian diaspora. Among the wealthiest, many remain wary of the political climate and prefer Miami or other international markets; but a significant portion continues to target properties in the country, particularly in Lima’s high-end segments and tourist destinations.
The diversity of buyer profiles is a key factor explaining the resilience and dynamism of the second home market, even in a broader economic context that is more fragile for the real estate sector.
Price Levels and Yields: A Still Attractive Profile
In terms of prices, Peru offers an entry point considered competitive in the Latin American context. The average value of a home nationwide hovers around $140,000 to $180,000. The average price per square meter is estimated at about $2,700, but this national figure masks very marked differences between Lima, secondary cities, the tourist coast, Andean regions, and the Amazon.
To grasp the specific nature of secondary homes, it is useful to look at price levels and rental yields in the areas most sought after for this type of property.
Simple Comparison of Major Markets
The table below summarizes some orders of magnitude by major types of areas, based on available data for 2024-2025.
| Zone / Market | Average Price / m² (USD) | Typical Property Price (USD) | Average Gross Rental Yield |
|---|---|---|---|
| Lima – Premium Neighborhoods | 2,000 – 3,500 | 200,000 – 500,000+ | 5 – 7 % |
| Secondary Cities (Arequipa, Cusco, Trujillo, Piura) | 700 – 1,200 | 80,000 – 200,000 | 5.5 – 6 % (often higher) |
| Northern Beaches (Máncora, Vichayito, Punta Sal) | 1,200 – 2,200 | 150,000 – 350,000 | 5 – 8 % (vacation) |
| Central Coast – Asia, Punta Hermosa | 1,600 – 2,800 | 180,000 – 450,000 | 5 – 8 % (high seasonality) |
| Sacred Valley (Cusco and Surroundings) | 800 – 1,500 | 180,000 – 400,000 | 6 – 8 % (tourist rental) |
| Amazon (Iquitos, Pucallpa) | 1,500 – 3,000 PEN/m² (≈ 400–800 USD) | 70,000 – 260,000 (lodges & eco-lodges) | 6 – 9 % on well-managed products |
In Lima, the gap is clear between premium center (Miraflores, San Isidro, Barranco) and more residential or emerging districts (Surco, La Molina, Surquillo, San Miguel), but the latter are more relevant for primary residences. The second home market concentrates on three main axes: coastline (north and south), Andean tourist destinations, and a few Amazonian pockets.
This is the average gross rental yield for apartments in Lima, according to national data.
Lima, Showcase and Locomotive, But Not Always the Best Price/Pleasure Ratio
Even though the purpose of a second home is to escape the capital, Lima remains at the center of the game, for two reasons: first, because a good portion of buyers live there and generate their income there; second, because certain areas of the metropolis have themselves become destinations for leisure or short-term rental investment.
Miraflores, San Isidro, Barranco: The Golden Triangle for Investors
Miraflores concentrates a significant share of investments in apartments with ocean views or close to the waterfront. The price per square meter for apartments there is expected around $3,500, with annual increases close to 5% in recent years. Short-term rentals via Airbnb benefit from a median occupancy rate of about 63%, allowing for a target gross yield of around 5.2 to 6.7%.
The price per square meter in the high-end segment of San Isidro reaches or exceeds $3,000.
Barranco, finally, has established itself as a chic bohemian neighborhood, highly sought after by young professionals, creatives, artists, but also tourists looking for a more intimate setting than Miraflores. Prices oscillate around $1,800 to $2,600 per square meter, with gross yields of 5.4 to 5.8%. For a second home with mixed use – a few weeks per year occupied by the owner, the rest rented to visitors – it’s one of the most sought-after compromises.
Residential Districts and Beach Proximity: La Molina, Surco, Punta Hermosa
La Molina illustrates another profile of second home: that of the spacious house with a garden, used on weekends or as an extended family residence, rather than as a tourist rental product. This district offers a good quality of life, lots of greenery, and a sense of security sought by expatriates and the upper-middle classes. The price per square meter (about $2,200 to $2,800) and steady appreciation estimated between 3 and 7% over a few years make it a market more oriented towards “heritage” than immediate yield.
This is the average number of nights rented per year for short-term rentals on Lima’s southern beaches.
The Coastal Boom: From the Tropical North to the South “Lima Beach Resort”
For vacation-use second homes, the coast remains the star. The price/climate/tourist appeal ratio there is particularly interesting, even if the available figures remain fragmented.
On the northern coastline, Máncora and Vichayito illustrate well the logic of this market: beach villas between $1,200 and $2,200 per square meter, total prices of $150,000 to $350,000 for upscale properties, a mixed clientele (Lima residents, foreigners, digital nomads), and the opportunity to rent the property seasonally at theoretical gross yields of 5 to 8%. Punta Sal positions itself a notch above, with beachfront condos priced around $1,400 to $2,000/m².
Land near beaches trades between $30 and $150/m². Prices in mountainous areas are often 30 to 50% lower than those on the coast, and those in the Amazon can be 60 to 80% lower. For an investor, the choice is between paying a high price for a highly touristic coastal location or opting for a lower entry ticket in the Andes or Amazon, with the hope of future capital appreciation.
Second Homes and Short-Term Rentals: A Successful Couple
Rental yield figures confirm the appeal of the mixed second home + seasonal rental model. Nationally, the average gross rental yield hovers around 6%, with peaks beyond 7% in certain tourist segments. Sector experts estimate that well-located beach properties can aim for, over a full annual cycle, 5 to 8% yield, relying on strong rate increases during high season to compensate for empty weeks.
In organized markets, agencies or independent managers typically charge between 20% and 30% of gross income for full management (marketing, guest reception, cleaning, and minor repairs). Although this reduces the net yield, this service is advantageous for owners located hundreds of kilometers away, as it spares them heavy logistics.
Cusco, Sacred Valley and Andean Cities: The Heritage and Tourist Side
Beyond the coast, the second major pillar of the Peruvian second home market is found in the Andes, particularly in the Cusco region and the Sacred Valley. Here, the main driver is not beachside vacationing, but cultural and nature tourism.
Cusco: The Tourist Hub Driving Airbnb
Cusco is the emblematic example of the convergence between second homes, vacation rentals, and tourist capital. In 2023, nearly 950,000 visitors went to Machu Picchu; in September 2024, the city had over 3,300 active listings on Airbnb, with an average occupancy rate around 52% and about 190 nights booked per year for an average property. Over 70% of this clientele is international.
Average annual growth rate of real estate prices in Cusco since 2020.
For an investor seeking a second home to operate as a short-term rental, projections mention gross yields between 7 and 9% for well-positioned products (characterful architecture, good management, strong online presence). The outlook remains positive: local GDP is expected to rise by over 11% over five years, and international tourism to Peru – heavily slowed by the pandemic – is approaching its record levels.
Sacred Valley: Country Houses and Charming Lodges
In the Sacred Valley, between Cusco and Machu Picchu, the market is more discreet but just as promising for second homes. Prices per square meter are generally between $800 and $1,500, for country houses, small lodges, or villas nestled in the mountains. Typical total budgets range from $180,000 to $400,000.
Specific segment attracted to comfortable rural properties in the Andes, with particular rental models.
People in search of a comfortable rural life in an Andean setting.
Professionals developing activities in the local tourism sector.
Investors in sustainable lodging integrated with the environment.
Lima residents desiring a place of retreat and renewal in the Andes.
Yields of 6 to 8% based on light hotel operation or medium-term rentals.
Arequipa, Trujillo, Piura: Secondary Cities Becoming Leisure Markets
The “decentralization” of the Peruvian real estate market largely benefits intermediate cities. Ica, Arequipa, Piura, La Libertad (where Trujillo is located), and Paracas are described as genuine “hotspots” for investors wanting to get out of the capital.
Arequipa suffers from a housing deficit estimated at 55,000 units, growing 6% annually.
For a second home buyer, Arequipa combines several assets: a strong local economy, a strong heritage dimension, a pleasant climate, and prices significantly lower than Lima’s. Rental yields remain slightly below the capital’s (around 5.5% on average), but the prospect of 5 to 7% annual appreciation in the medium term partly compensates for this difference.
Tourism generated $4 billion in revenue for the country in 2023, a sector to which the city of Trujillo contributes significantly.
Piura, supported by a flourishing agricultural and commercial economy, is experiencing a residential “boom,” with offerings of housing developments and buildings targeting both primary and secondary residences. Here again, entry prices are significantly lower than Lima’s, with apartments between $50,000 and $150,000 depending on location and standard.
The Amazon: Eco‑Touristic Niche for Experienced Profiles
The third major scene for Peruvian second homes, riskier but potentially very profitable, is located in the Amazon. Iquitos and Pucallpa are its main entry points.
Iquitos, Peru’s largest Amazonian city, received about 742,000 visitors in 2019, a figure exceeding its own population.
This type of property appeals to a very particular buyer profile: investors passionate about ecotourism, international entrepreneurs, even NGOs or families seeking to combine a life project with economic activity. Gross yields can exceed 7 to 9% for well-managed structures, but regulatory complexity (environment, land rights, titling, cultural constraints), logistical challenges, and extreme dependence on tourism require a risk tolerance above average.
Taxation, Transaction Costs, and Financing: A Framework to Integrate from the Start
The charm of a beach house or mountain lodge should not make us forget the financial and tax architecture that frames any purchase in Peru. For secondary homes intended to be rented, especially by non‑residents, these parameters can significantly alter real profitability.
Acquisition Costs: A Non‑Negligible Barrier
Transaction costs generally range between 6 and 9% of the purchase price. They consist mainly of a transfer tax (Alcabala) of 3% on the value exceeding 10 UIT (approximately $13,000), notary fees (0.5 to 1%), registry inscription (0.3 to 0.5%), legal fees (1 to 2%), and appraisal fees (0.1 to 0.3%). For a property of $200,000, this represents between $12,000 and $18,000 to add to the budget.
Even if, in practice, many sellers assume agency commissions, the buyer bears the majority of public and professional fees, which encourages planning with a sufficiently long holding horizon to amortize these entry costs.
Ongoing Taxation and Rental Income Taxation
Once an owner, the holder of a second home pays an annual municipal tax (Impuesto Predial), at a progressive rate of 0.2 to 1% of the cadastral value, as well as municipal service taxes (Arbitrios), around $100 to $300 per year depending on the municipality. Modern condominiums also charge monthly fees of $80 to $250, especially in buildings with pools, gyms, and enhanced security.
Flat tax rate on gross rental income for non-resident investors in Peru.
This taxation/status asymmetry encourages many foreigners to structure their project either through tax residency in Peru – which implies other commitments – or through more sophisticated setups, sometimes using local entities. Otherwise, the net after-tax profitability is significantly reduced compared to the advertised gross yield.
Capital Gains and Investment Exit
Regarding capital gains, non‑residents are also taxed at 30% on the gain realized upon resale, while residents benefit from a rate of 5% in the general case, with possible exemptions if the property is a primary residence held for more than two years. In the case of second homes, this exemption rarely applies, so this exit taxation must be integrated into the overall profitability calculation.
For a buy-to-let investment over 8-10 years in Peru, a gross yield of 6 to 8% can be combined with expected annual capital appreciation of 5 to 9% in specific markets (northern beaches, developing districts of Lima, Cusco/Sacred Valley). Despite heavy but predictable taxation, the internal rate of return can be attractive, provided the legal structure is optimized and management costs are well anticipated.
Financing: A Still Narrow Mortgage Market
The use of credit remains more limited than in Europe or North America. The total volume of mortgage loans represents only about 6.3% of GDP, with a portfolio value of around 66.5 billion soles at the end of 2024 ($17.7 billion). More than 50% of purchases are still made in cash.
Average interest rate for loans in soles in Peru, with ranges from 7 to 11% depending on term, currency, and borrower profile.
For foreigners, access to local credit is more difficult. Banks often require resident status, a local account, and proof of stable income, with minimum down payments of 20 to 30%. The rare financing offered to non‑residents may require up to 40 to 50% down payment. Under these conditions, 85 to 90% of international buyers opt for a cash purchase or financing via their country of origin.
Who Actually Buys Second Homes in Peru?
The profile of second home buyers is more diversified than one might imagine. Several major families of players can be identified:
Overview of main investors in the Peruvian real estate market, ranging from national residents to international players.
Middle- and upper-class Limeños who buy a beach house south of the capital or a villa in the north (Máncora, Vichayito), often shared with family and occasionally rented.
Families from regions like Arequipa, Trujillo, or Piura, who acquire an apartment in Lima or a second home by the sea, for prestige and investment.
Mainly North Americans and Europeans, looking for a pied-à-terre in Miraflores, Barranco, Cusco, or the Sacred Valley, often for tourist rental.
Representing a significant share of the high-end market, these buyers often combine prestige investment and sentimental attachment to their home country.
Professional players who build portfolios of short-term rental housing in tourist areas, or develop eco-lodge projects in the Amazon.
Preferences are evolving, however. We observe a growing demand for so-called “functional, sustainable, and technological” properties: compact but well-designed homes, condos with gyms, pools, and green spaces, buildings with home automation technologies and smart security devices. Developers indeed invest several hundred dollars per apartment in these amenities, and the residential connected devices market is expected to triple by 2032.
Sustainability is a growing criterion, materialized by certifications (LEED, EDGE, BREEAM) in new builds and municipal incentives like height bonuses. For a second home, these environmental assets can enhance the property’s resale value, particularly with a young and demanding clientele.
An Open Legal Framework, But Requiring Real Due Diligence
Legally, Peru is distinguished by a property regime particularly open to foreigners. Article 71 of the Constitution guarantees non‑nationals property rights equivalent to those of citizens, with the exception of a 50‑kilometer strip along international borders, where restrictions apply for national security reasons. This openness is reflected in practice: no quotas or value ceilings are imposed, and most transactions can be carried out on a simple tourist visa, provided authorization to sign contracts is obtained from immigration.
In Peru, risks exist due to incomplete or informal land titles, particularly in rural and Amazonian areas. It is imperative to conduct meticulous checks via the public registry (SUNARP), taking into account unauthorized constructions, boundary disputes, and possible overlaps with community lands or culturally protected status lands.
The intervention of a local specialized lawyer is therefore more than recommended, especially for second homes located outside major urban centers. The typical purchase process involves a “minuta” (draft contract), a sales promise possibly accompanied by a deposit – generally around 10% of the price – then signing a public deed before a notary, and finally registration at the registry. In this segment, due diligence mistakes can be very costly, especially for non‑residents unfamiliar with local administrative subtleties.
Outlook: A Pivotal Decade for Second Homes
Projections from the main sector players converge on one point: the next decade should be marked by a sustained rise of regional and tourist markets, to the detriment of a long-hegemonic Lima. Analysts expect annual price appreciation of 6 to 8% in some growth corridors of the capital, but up to 8 to 10% in the northern beaches and 6 to 8% in the Cusco‑Sacred Valley region.
Major investments in the National Infrastructure Plan (highways, regional airports, fiber optics, Lima metro, bio-oceanic rail corridor) aim to enhance the attractiveness of currently peripheral areas. These projects will reduce travel times and increase land value. The northern and southern coastal corridors, the Arequipa-Majes and Junín-Satipo axes, and areas near strategic port and railway projects are identified as the main potential beneficiaries.
In parallel, domestic demand for leisure or investment second homes should continue to grow, driven by unabating urbanization, an expanding middle class, and domestic tourism encouraged by campaigns like “Vívelo en Perú.” The most common assumption among professionals is that from 2026, regional markets will exceed Lima in growth rate, strengthening the appeal of second homes outside the capital.
Institutional instability and social tensions can quickly freeze construction projects, disrupt the tourism sector, and destabilize the currency. To mitigate these risks, experienced investors adopt several strategies: they diversify their geographic locations, take out insurance against natural disasters (such as earthquakes or El Niño phenomena), and surround themselves with solid legal and tax advice.
Despite these uncertainties, Peru’s second home market presents a rare profile: prices still affordable on an international scale, growth potential supported by tourism and urbanization, and rental yields higher than those of many countries in the region. For those ready to deal with local complexity, the beach house, the Andean casona, or the Amazonian lodge can thus become much more than a simple refuge: a heritage asset at the crossroads between pleasure and investment.
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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.
