Real estate in Arequipa, PeruColonial charm, volcanic viewsand modern apartments

Real Estate in Arequipa, Peru

Why Invest in Property in Arequipa

Arequipa, Peru’s second-largest city, offers a compelling real estate market characterized by affordability, colonial charm, and growing local demand. Known as the “White City” for its iconic sillar stone architecture, Arequipa combines economic dynamism with a high quality of life. With a population of over 1 million, a strong middle class, and increasing internal migration, Arequipa is emerging as a stable investment location. It serves as a commercial and industrial hub in southern Peru, with robust tourism, a thriving services sector, and one of the country’s most respected university systems. Investors are drawn to its low property prices, consistent rental demand, and expanding infrastructure.

Types of Real Estate in Arequipa

Arequipa’s property market offers a variety of residential and commercial options:

• Colonial-style houses — Particularly in the historic center, ideal for boutique hotels or cultural conversions.
• Modern apartments — Found in newer districts like Yanahuara, Cayma, and Cerro Colorado.
• Townhouses and duplexes — Common in suburban areas and new developments.
• Commercial properties — Retail units and offices in central and emerging business districts.
• Land plots — Available on the city’s outskirts, often used for gated community projects or small developments.

Legal Framework and Ownership Rights

Property acquisition in Arequipa follows the same investor-friendly rules as the rest of Peru:

• Full foreign ownership is allowed — Individuals and companies can own property outright with no local partnership required.
• Transactions in U.S. dollars — Most property deals are conducted in USD, offering financial stability.
• Title registration via SUNARP — All real estate transactions are recorded with the national registry.
• Legal support and due diligence — Typically handled by a notary and lawyer to ensure the property is free of liens or disputes.
• Tax ID (RUC) and local representation — Required if the investor wants to rent out or manage property on a commercial basis.

Price Ranges and Market Trends

Arequipa offers one of the most affordable property markets among major Latin American cities:

• Modern 2–3 bedroom apartments: $60,000 – $120,000 depending on size and location
• Houses in middle-class suburbs: $100,000 – $180,000
• Colonial buildings in the historic center: $150,000 – $500,000+ depending on condition and size
• Land plots: $15,000 – $80,000 for residential development
• Retail or office units: $80,000 and up depending on location and foot traffic

While Lima has experienced significant price increases, Arequipa remains undervalued, offering potential for capital appreciation as infrastructure improves and demand grows. Key investment districts like Cayma and Cerro Colorado have shown steady value increases of 5%–8% per year.

Rental Demand and Yields

Rental demand in Arequipa is driven by:

• Students — Especially near Universidad Nacional de San Agustín and private universities.
• Middle-income families — Seeking long-term rentals in safe and accessible neighborhoods.
• Small business owners — Looking for commercial space in expanding urban zones.
• Tourists and short-term stays — Concentrated in the historic center, although less active than Lima or Cusco.

Rental rates:

• 1-bedroom apartment: $200 – $350/month
• 2–3-bedroom apartments: $300 – $600/month in central or northern districts
• Houses: $500 – $800/month in Cayma, Yanahuara, or upscale neighborhoods
• Short-term rentals (Airbnb): $25 – $70/night in tourist zones

Gross rental yields range between 6% and 9%, with higher potential in student-oriented or multi-unit properties. Well-maintained apartments near universities or shopping centers are among the most liquid rental options.

Top Neighborhoods and Investment Zones

Arequipa’s best areas for real estate investment include:

• Cayma — An upscale district with modern infrastructure, shopping centers, and good security. Attracts professionals and families.
• Yanahuara — A blend of tradition and comfort with colonial streets, boutique hotels, and apartments for locals and tourists.
• Cerro Colorado — Rapidly developing area with new residential projects, large supermarkets, and access to the airport.
• Selva Alegre — Popular with students and young couples due to its location and affordability.
• Centro Histórico — UNESCO-listed area with renovation potential for boutique hotels, cultural centers, or serviced apartments.

Infrastructure and Urban Development

Arequipa is benefiting from infrastructure investment across multiple sectors:

• New airport terminal project — Will boost domestic and international connectivity.
• Road and highway expansion — Improving access to Cerro Colorado, Majes, and suburban residential areas.
• Water and sanitation programs — Supported by government and development agencies to improve urban quality.
• Smart city initiatives — Including improved digital access and transportation modernization.
• Public-private housing partnerships — Encouraging new middle-income developments and social housing.

Buying Procedure and Transaction Costs

Property purchases in Arequipa follow a clear legal process:

• Offer and agreement — Usually signed as a Promesa de Compra-Venta with price and terms.
• Due diligence — Includes title check, municipal zoning compliance, tax clearance, and utility verification.
• Notarial deed (Escritura Pública) — Finalized with a notary public and then registered at SUNARP.
• Payment — Typically made via bank transfer in USD. Use of escrow is rare but possible via law firms.

Estimated costs:

• Legal and notary fees: 1.5% – 2.5% of the purchase value
• Registration fees: ~0.5%
• Annual property tax: Low, based on cadastral value

Who Should Invest in Arequipa

Arequipa is ideal for:

• Long-term capital investors — Looking for stable growth in a secondary urban market
• Yield-seeking landlords — Targeting students, middle-class tenants, or small businesses
• Renovation and boutique hotel developers — Focused on the colonial center
• Digital nomads and remote workers — Interested in low cost of living and pleasant climate
• Buyers priced out of Lima — Seeking similar services and urban amenities at lower entry points

Conclusion

Arequipa offers investors a unique mix of architectural beauty, affordability, and economic resilience. Whether you’re purchasing a rental apartment near a university, restoring a colonial building in the center, or acquiring land in a growing suburb, the city presents numerous real estate opportunities. With a transparent legal system, favorable tax regime, and solid local demand, Arequipa is becoming an increasingly attractive destination for both domestic and international investors in Peru’s real estate market.