The square meter in La Victoria and Chorrillos became more expensive and will continue to rise

The cooling of economic activity — which would have closed in 2023 its worst year in more than two decades without counting the pandemic and dragging down even the construction sector — did not affect the real estate market. Even with high inflation and a lower spending capacity, Peruvians continued to bet on the dream of home ownership.

As of December of last year, according to Urbaniathe average price per square meter (m2) in Metropolitan Lima It reached S/6,647, approximately S/1,000 more than in mid-2019. In detail, a 60 m2 apartment, with two bedrooms, has an average of S/410,056 and a 100 m2 apartment, with three bedrooms, S/646,012 .

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Why did the price increase in La Victoria and Chorrillos?

The districts with the greatest price variation in annual terms were La Victoria (13%) and Chorrillos (10.2%), basically due to the high dynamism of real estate projects. Despite the rebound, they are far from being the most expensive places.

In the Victorian commune, the average per m2 is S/5,910, and the increase in its values ​​is explained by the development of more residential works in the Santa Catalina area – the nerve center of the capital as it concentrates avenues such as Canada, Aviación, Nicolás Arriola, Javier Prado Este and Paseo de la República—and that, due to its proximity to Lince and San Isidrois a more attractive option, according to Leandro Molina, country manager of Grupo QuintoAndar.

While Chorrillos—with an average of S/5,529 per m2—is experiencing a real estate boom, being a cheaper alternative for beachfront apartments when compared to Miraflores and Barranco, where the cost of the average square meter is S/ 8,582 and S/9,461, respectively.

Cheaper options

The greatest decrease in the value of m2 is The Olive Trees (-5.4%), which achieved an average of S/3,790, with its most comfortable value found in its western area – adjacent to San Martín de Porres: S/3,505.

The fall, in Molina’s opinion, is explained by the high interest rate in much of 2023, which forced real estate companies to reduce the value of the square meter so that it can be more accessible to potential buyers.

San Juan de Miraflores and San Martín de Porres complete the table, with average prices of S/3,538 and S/3,175 per m2. The Callao region has S/3,534, and its value decreased 3.3%.

“Buy now because prices will continue to rise”

Specialists, consulted by La República, pointed out a few days ago that the construction and investment of family projects will recover in 2024 as a result of the decline in the reference interest rate of the Central Reserve Bank of Peru (BCRP) – now set at 6.50 %—which will gradually lower that of mortgage loans. “For every 1% less in the rate, more families will qualify for a mortgage loan,” according to Ricardo Arbulúgeneral manager of Ciudaris.

However, prices will continue to rise. Luciano Barredo, marketing manager of Urbania and Where to livewarns that “the price of real estate is not going to go down” and recommends: “If you have the opportunity to buy right now, do it.”

The reason? 70% of the construction materials used in the works are imported and the price with which the properties are built is also varied by the exchange rate with which they are acquired, which reflects what has been recorded to date. with the recession and increase in mortgage interest rates.

New areas and models of interest

It is expected that districts of modern Lima, such as San Miguel, Lince and Surquillo —where the variation in prices was very limited (see graph)— emulate what was seen in La Victoria and Chorrillos due to the presence of new real estate projects and taller buildings that allow for more homes of different sizes and a large price range. Barredo points out that this trend is already observed in Cercado de Lima and La Perla, both for rent and for sale.

Likewise, those interested in purchasing an apartment spend more time searching. On platforms such as Urbania and Adondevivir, the average stay is 9 minutes. The preference has grown for properties with one or two rooms, and that the property does not exceed 60m2; as well as the largest spaces, up to four bedrooms, with the bonus of having a home office.

Rental demands almost three minimum salaries

As of December 2023, the average monthly apartment rental price reached S/2,876, so a person needs up to three minimum salaries —set at S/1,025— to meet this need.

The highest price is in Barranco, with S/3,859 for a 100 m2 home with three bedrooms. It is followed by San Isidro (S/3,499), Miraflores (S/3,239) and Lince (S/3,127).

Barredo points out that for 2024 it will depend on the fluctuation of the dollar in our market so that prices do not rise further, although if sales move more strongly, rental prices “could remain the same and in some cases could decrease.”

Meanwhile, the most comfortable districts for rent are Ate (S/1,916), Los Olivos (S/1,489) and San Martín de Porres (S/1,313).

Yessica Reyes, commercial director of Grupo Lar, comments that while the deficit of living place If you are not satisfied with new housing, the rental market could remain stable and growing. It is worth noting that currently the deficit is one million homes.

It will be a better year to invest in real estate

Reyes maintains that the fall in the reference rate will feed the sector, since more competitive mortgage rates will be generated, which will raise sales and rental indicators. “On our part, we project a significant increase in sales considering that we will have more projects in commercialization than in 2023,” he said.

The Urbania report establishes that 20.6 years of rent will be required to recover the investment shopping. The most profitable districts are Cercado de Lima (5.7%), Surquillo (5.6%), La Molina (5.6%) and Jesús María (5.3%). The average for the capital is 4.8%, that is, annually, it recovers that rate of the value paid.