Real Estate Prices

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DC_20833

Real Estate Prices

Postby DC_20833 » Fri May 16, 2014 7:04 am

I was speaking with my Realtor here about prices because I need to sell my last apartment here in Peru before leaving. She said based upon resale information she has from properties that have sold this is a rough guide for San Isidro.

$1800 - $4500 per sqm in San Isidro. A new or totally refurbished apartment fronting the Golf Course in a building with underground parking and a decent lobby would be in the $3400-$4500 range. 1 to 5 years old is $3000 to $4000 depending on the floor and view of the Golf Course. $1800 would be on Av. Javier Prado and going towards Lince. I got within the quoted price range for mine which is right on the Golf so this sounds about right.

I was told the location matters apartments in San Isidro apartments closest to or on the Golf are selling after about 150 days if the properly priced at this time. That is what I experienced when I sold. Other apartments are taking anywhere from 150-200 days if priced properly.

Three years ago everything was selling and selling quickly (30 days or less) so the market has slowed here and prices were going up about 15% annually. Many Peruvians who left Europe are returning there and are selling their apartments the only exception would be those who want to return to Spain and Portugal. Peruvians who left the states are returning too but are sometimes renting out their apartments when they are not here. No information on rentals.

It should be interesting to watch and see if the current slowdown is just that a slowdown and if prices start to rise again and sales pickup. Anybody have any experiences?


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Re: Real Estate Prices

Postby chi chi » Fri May 16, 2014 10:17 am

DC_20833 wrote:I was speaking with my Realtor


It's much harder to sell a property using a real estate agency in Peru as buyers will think that you added the agency's comission to the sales prices.

My gf told me that using an agency is a ripp off. Why paying thousands of soles whilst you can put a free add on websites like olx.com.pe, adondevivir.com and urbania.pe?

Those agencies do the same thing. They put free adds on websites and charge you thousands of soles for it.
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Re: Real Estate Prices

Postby Lloyd007 » Fri May 16, 2014 11:52 am

This is an excellent post and yes, the market has slowed a lot I think. About 2 years ago I sold a property in about 2 weeks. Maybe I should have asked for more...!?!

Nowadays, second hand and older apartments are taking longer to shift and I also think that some prices are massively inflated. For example, a street that runs parellel to av. Ejercito in Miraflores is called Mendiburu and has a lot of combi traffic and a market. I called about an apartment that had an ad in the window (purely out of curiosity) and they were asking US$179,000 for an 83 sq.m apartment. That's US$2150 per meter. And no parking space. And No deposito = insane! They will never sell it being so greedy and unrealistic.

Getting a good deal or a bargain is virtually impossible. The new, large apartments on the Malecon Miraflores (towards Parque Mria Reiche, not Larcomar end, which I don't know much about)are around US$1 million. What's odd is that they are all sold before they are even built. Who is buying them? What do they do for a living?
DC_20833

Re: Real Estate Prices

Postby DC_20833 » Fri May 16, 2014 1:47 pm

Lloyd007 wrote:This is an excellent post and yes, the market has slowed a lot I think. About 2 years ago I sold a property in about 2 weeks. Maybe I should have asked for more...!?!

Nowadays, second hand and older apartments are taking longer to shift and I also think that some prices are massively inflated. For example, a street that runs parellel to av. Ejercito in Miraflores is called Mendiburu and has a lot of combi traffic and a market. I called about an apartment that had an ad in the window (purely out of curiosity) and they were asking US$179,000 for an 83 sq.m apartment. That's US$2150 per meter. And no parking space. And No deposito = insane! They will never sell it being so greedy and unrealistic.

Getting a good deal or a bargain is virtually impossible. The new, large apartments on the Malecon Miraflores (towards Parque Mria Reiche, not Larcomar end, which I don't know much about)are around US$1 million. What's odd is that they are all sold before they are even built. Who is buying them? What do they do for a living?


In reference to the buildings you are talking about on the Malecon two years ago they were sold out. Today you will see a few apartments left as the construction ends and they are usually on the lower floors. The Penthouses and nice apartments are gone. There is some room for haggling on price if you do not bring a Realtor maybe 1.5-2% and 5-7% more if you are paying cash. It just depends on how sales are going. The other thing is these builders usually require you to pay 20% in cash with contract and more as construction approaches completion because you are enabling them to not take a Construction Loan or dig into their own cash.

Regarding the small apartment with no storage or parking that you were writing about it is simply over priced probably by 70% and will remain on the market until the seller gets more realistic about the real value. Many of the Realtors here will not accept a listing that is overpriced or will accept it and not promote it until the seller gets more realistic. They will take it only to get leads for listings they have or know of that are more realistically priced.
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Re: Real Estate Prices

Postby panman » Fri May 16, 2014 1:50 pm

Lloyd007 wrote:The new, large apartments on the Malecon Miraflores (towards Parque Mria Reiche, not Larcomar end, which I don't know much about)are around US$1 million. What's odd is that they are all sold before they are even built. Who is buying them? What do they do for a living?

It's the black lamborghini brigade :twisted:
DC_20833

Re: Real Estate Prices

Postby DC_20833 » Fri May 16, 2014 2:18 pm

chi chi wrote:It's much harder to sell a property using a real estate agency in Peru as buyers will think that you added the agency's comission to the sales prices.


The better properties and those in San Isidro and Miraflores are usually listed by Realtors. Here is why I use a Realtor when selling. The realtor screens all calls and required that anybody who wanted to see my apartment to prove they had the money to pay for it. If they claimed they were financing then they had to have a letter from a Bank saying they would loan a certain amount usually 70% and then prove they had the 30% in cash. She only works with Realtors who have the same requirements and if they were not known to her she required the proof I stated. This eliminates the people who aren't serious.

Buyers also know the Realtor checks the Title on the property so there are no surprises when the Notary does his or her work. Remember the 10% of the agreed purchase price goes directly to the Seller not to the Realtor when the Purchase Agreement is signed.

chi chi wrote:My gf told me that using an agency is a ripp off. Why paying thousands of soles whilst you can put a free add on websites like olx.com.pe, adondevivir.com and urbania.pe?


Great information Chi Chi. What are your girlfriends professional qualifications and experience to give such advice?

chi chi wrote:Those agencies do the same thing. They put free adds on websites and charge you thousands of soles for it.


This is true but those sites also give preference to ads by Realtors because of the volume of ads sent in by them. When my apartments were for sale if I searched a site giving criteria my apartments would show up in the first five. Read any marketing study the first 5-10 listings get 4 to 5 times the response that the listings that appear later. More responses means more demand.

Yes, there is a cost in dealing with a Realtor the commission here is 3.5-4% of the sales price which they split with the selling agent's broker. However, a good realtor knows the market so you don`t over or under price your property and helps you stage your apartment so it shows well. The problem of under pricing is obvious but when you ask too much your property is not shown and becomes old news when you finally wake up and becomes harder to sell. My realtor hardly advertises her listings on the sites and publications you mention she works through her network of Realtors to find a buyer and her own leads. Peru is all about contacts so a Realtor is a must especially in certain districts.

Finally, I tried your way Chi Chi listing it on the websites you mentioned the calls were pure crap and people don`t show up or are late, etc. I put signs in the window and the same things happened. Then you have to be there to show it. It is a lot of work I would rather spend my time doing my work which more than makes up for the commission I pay the Realtor.

Before I list with a Realtor I always talk to the Doorman and let him know I want to sell because people interested in buying will sometimes leave their contact information with him and then I have my Assistant call them and show the apartment. I sold two apartments that way and it worked out well for me and the buyer. However, when that source was exhausted I would call my Realtor and let her take over.
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Re: Real Estate Prices

Postby ironchefchris » Fri May 16, 2014 3:06 pm

As Benjamin Franklin once advised, "Time is money."
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Re: Real Estate Prices

Postby chi chi » Fri May 16, 2014 11:25 pm

Lloyd007 wrote:This is an excellent post and yes, the market has slowed a lot I think. About 2 years ago I sold a property in about 2 weeks. Maybe I should have asked for more...!?!

Nowadays, second hand and older apartments are taking longer to shift and I also think that some prices are massively inflated. For example, a street that runs parellel to av. Ejercito in Miraflores is called Mendiburu and has a lot of combi traffic and a market. I called about an apartment that had an ad in the window (purely out of curiosity) and they were asking US$179,000 for an 83 sq.m apartment. That's US$2150 per meter. And no parking space. And No deposito = insane! They will never sell it being so greedy and unrealistic.


Prices in áreas like Miraflores and San Isidro will go down a lot or will become imposible to sell. The competition from other districts is too tough. Other districts are improving a lot and will be similar to San Isidro and Miraflores son. Miraflores and San Isidro are also known for thick smog, noise, heavy traffic and traffic jams,.
Last year, I bought a brandnew two bed flat in Puenta Piedra for $29000. It a very nice área. No traffic jams, no noise, no smog, close to the airport and nice shopping centres in Puenta Piedra. It's a hidden gem in Lima.

San Isidro and Miraflores can't compete with the benefits that Puente Piedra has to offer.
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Re: Real Estate Prices

Postby panman » Sat May 17, 2014 7:29 am

Definately a good investment area but, I had the misfortune of having to drive through Puenta Piedra on Thursday. It took me 2 hours to get to San Miguel :(
DC_20833

Re: Real Estate Prices

Postby DC_20833 » Sat May 17, 2014 6:16 pm

chi chi wrote:Prices in áreas like Miraflores and San Isidro will go down a lot or will become imposible to sell. The competition from other districts is too tough. Other districts are improving a lot and will be similar to San Isidro and Miraflores son. Miraflores and San Isidro are also known for thick smog, noise, heavy traffic and traffic jams,.


There are three rules in real estate LOCATION, LOCATION and LOCATION. Is traffic a problem in San Isidro and Miraflores? For sure everybody wants to be in those Districts. Shopping options are plentiful and a wide range of options for Dining out. I doubt prices will go down the costs of ownership here is low most people in Miraflores and San Isidro do not have Mortgages. I was speaking with a builder here and he told me 90 percent of the buyers are paying cash it is the same with resales. The monthly maintenance is low when you consider the income levels of the people who live here. In any real estate turn down what causes a deep drop in prices is when people have to sell because they do not want to pay the monthly mortgage anymore so they cut the price. That is not the case in these Districts. What will happen and is happening is people will wait for a buyer or rent the apartment out. Rentals have not slowed here nor has rent gone down and in some cases the rent has gone up.

chi chi wrote:San Isidro and Miraflores can't compete with the benefits that Puente Piedra has to offer.


You are talking about comparing Apples and Oranges Chi Chi. However, to be fair what exactly are the benefits that Puente Piedra have to offer than San Isidro and Miraflores do not have?
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Re: Real Estate Prices

Postby Sergio Bernales » Sat May 17, 2014 10:41 pm

DC_20833 wrote:
chi chi wrote:Prices in áreas like Miraflores and San Isidro will go down a lot or will become imposible to sell. The competition from other districts is too tough. Other districts are improving a lot and will be similar to San Isidro and Miraflores son. Miraflores and San Isidro are also known for thick smog, noise, heavy traffic and traffic jams,.


There are three rules in real estate LOCATION, LOCATION and LOCATION. Is traffic a problem in San Isidro and Miraflores? For sure everybody wants to be in those Districts. Shopping options are plentiful and a wide range of options for Dining out. I doubt prices will go down the costs of ownership here is low most people in Miraflores and San Isidro do not have Mortgages. I was speaking with a builder here and he told me 90 percent of the buyers are paying cash it is the same with resales. The monthly maintenance is low when you consider the income levels of the people who live here. In any real estate turn down what causes a deep drop in prices is when people have to sell because they do not want to pay the monthly mortgage anymore so they cut the price. That is not the case in these Districts. What will happen and is happening is people will wait for a buyer or rent the apartment out. Rentals have not slowed here nor has rent gone down and in some cases the rent has gone up.

chi chi wrote:San Isidro and Miraflores can't compete with the benefits that Puente Piedra has to offer.


You are talking about comparing Apples and Oranges Chi Chi. However, to be fair what exactly are the benefits that Puente Piedra have to offer than San Isidro and Miraflores do not have?


What's a real estate turn down? Is it when estate agents make your bed and leave a chocolate kiss on the pillow?
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Re: Real Estate Prices

Postby chi chi » Sun May 18, 2014 8:31 pm

DC_20833 wrote:
chi chi wrote:Prices in áreas like Miraflores and San Isidro will go down a lot or will become imposible to sell. The competition from other districts is too tough. Other districts are improving a lot and will be similar to San Isidro and Miraflores son. Miraflores and San Isidro are also known for thick smog, noise, heavy traffic and traffic jams,.


There are three rules in real estate LOCATION, LOCATION and LOCATION. Is traffic a problem in San Isidro and Miraflores? For sure everybody wants to be in those Districts. Shopping options are plentiful and a wide range of options for Dining out.
chi chi wrote:San Isidro and Miraflores can't compete with the benefits that Puente Piedra has to offer.


You are talking about comparing Apples and Oranges Chi Chi. However, to be fair what exactly are the benefits that Puente Piedra have to offer than San Isidro and Miraflores do not have?


If location was important then San San Miguel, Pueblo Libre and Magdalena will score better. Those districts are close to the city center and close to the airport. Avenida La Marina in San Miguel is probably the best shopping street in Lima. On that Avenue, you can buy everything. There are 4 big supermarkets and the fabulous Plaza San Miguel shopping center. The Mercado in Magdalena is one of the best and biggest in Lima.
I never heard about a good mercado in San Isidro or Miraflores. And I haven't seen a decent shopping center there either.

I was used to run a lavandería in Magdalena. A big chunk of my customers were from Miraflores and San Isidro. They told me that you can't find a decent lavandería in S. Isidro or Miraflores. Magdalena Del Mar is full of spa's and hairdressing places. Most of their customers are from S. Isidro and Miraflores.

The outer districts of Lima like Puente Piedra, Ate Vitarte, Carabayllo are becoming popular. Many young families are moving there. There's far less smog, contamination, less traffic, more green áreas, less crime. Loads of new condominiums are being built there.

San Miguel, Magdalena, Puente Piedra, Carabayllo are served by airport shuttles. You can travel in no time from those districts directly to the airport for 1.50 soles.

There's no direct airport shuttle from San Isidro and Miraflores.
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Re: Real Estate Prices

Postby Sergio Bernales » Sun May 18, 2014 10:25 pm

Most people from Miraflores and San Isidro don't use lavanderias. They have washing machines or maids to do it for them.
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Re: Real Estate Prices

Postby chi chi » Sun May 18, 2014 11:21 pm

Sergio Bernales wrote:Most people from Miraflores and San Isidro don't use lavanderias. They have washing machines or maids to do it for them.


80% of my customers were from San Isidro and Miraflores. They probably have a washing machine but very few people have a dryer. On sunny days, I had less customers because people could dry their clothes on their balcony.

And clothes that have to be drycleaned, carpets, curtains and large duvets still have to be brought to a lavandería.
And then there are clothes that have staines that can't be removed with normal detergents. You need special products for it.
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Re: Real Estate Prices

Postby fanning » Sun May 18, 2014 11:25 pm

chi chi wrote:And clothes that have to be drycleaned, carpets, curtains and large duvets still have to be brought to a lavandería.

How much you charge for (dry) cleaning curtains ? You might get another customer from Miraflores ..
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Re: Real Estate Prices

Postby chi chi » Sun May 18, 2014 11:41 pm

fanning wrote:
chi chi wrote:And clothes that have to be drycleaned, carpets, curtains and large duvets still have to be brought to a lavandería.

How much you charge for (dry) cleaning curtains ? You might get another customer from Miraflores ..


Sorry but we closed the business.

My gf wanted to study and it was hard work for little money and after 1 year the landlord wanted to doublé the rent.

Anyway, the business went well and we were one of the more expensive laundries but our service was better and we washed with Ariel and not Sapolio. Are business was very clean. No piles of ropes on the floor. Everything was put in baskets. We neither washed together the clothes off one customer with the clothes of another customers like most laundries do. And things that got really drycleaned. Many lavanderías just remove the staines with a wet cloth and put some spray on it to smell nice and the customers pays for drycleaning and thinks it's drycleaned.
Another common practise is just wash the clothes but not rinsing them. From the prewash straight into the dryer.
They often use the same wáter over and over till it's almost black and too dirty to use it again. After the wash and the washer starts spinning, they put the hose in the machine next to it and pump the wáter over.
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Re: Real Estate Prices

Postby DC_20833 » Mon May 19, 2014 9:09 am

chi chi wrote:There's no direct airport shuttle from San Isidro and Miraflores.


You are correct on this one Chi Chi. Most People in San Isidro and Miraflores either have their own Drivers and Cars or use a Car Service or Cab when going to the Airport.

DC_20833 wrote:
Chi Chi wrote:My gf told me that using an agency is a ripp off. Why paying thousands of soles whilst you can put a free add on websites like olx.com.pe, adondevivir.com and urbania.pe?


Great information Chi Chi. What are your girlfriends professional qualifications and experience to give such advice?


I never saw a reply regarding your Girlfriend`s professional experience and qualifications to be giving such advice. Don`t you think it is important to give that information so people here can make informed decisions?
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Re: Real Estate Prices

Postby DC_20833 » Mon May 19, 2014 9:25 am

chi chi wrote:If location was important then San San Miguel, Pueblo Libre and Magdalena will score better. Those districts are close to the city center and close to the airport. Avenida La Marina in San Miguel is probably the best shopping street in Lima. On that Avenue, you can buy everything. There are 4 big supermarkets and the fabulous Plaza San Miguel shopping center. The Mercado in Magdalena is one of the best and biggest in Lima.

I never heard about a good Mercado in San Isidro or Miraflores. And I haven't seen a decent shopping center there either.


You are correct there is no Mercado in San Isidro or Miraflores. Most residents use the Super Markets. Plaza San Miguel is a great Center I go there frequently. Most residents either go there or to Jockey Plaza. Have you ever visited the shops on Av. Los Conquistadores in San Isidro? Many great stores selling very high quality merchandise. I bought some Patio furniture at a store there made in Germany very well made.

chi chi wrote:I was used to run a lavandería in Magdalena. A big chunk of my customers were from Miraflores and San Isidro. They told me that you can't find a decent lavandería in S. Isidro or Miraflores. Magdalena Del Mar is full of spa's and hairdressing places. Most of their customers are from S. Isidro and Miraflores.

The outer districts of Lima like Puente Piedra, Ate Vitarte, Carabayllo are becoming popular. Many young families are moving there. There's far less smog, contamination, less traffic, more green áreas, less crime. Loads of new condominiums are being built there.


This is totally off topic the subject here is Real Estate Prices and the current market conditions in San Isidro and MIraflores and the benefits the Districts offer.
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Re: Real Estate Prices

Postby tupacperu » Mon May 19, 2014 11:08 am

DC_20833 wrote:I was speaking with my Realtor here about prices because I need to sell my last apartment here in Peru before leaving. She said based upon resale information she has from properties that have sold this is a rough guide for San Isidro.

$1800 - $4500 per sqm in San Isidro. A new or totally refurbished apartment fronting the Golf Course in a building with underground parking and a decent lobby would be in the $3400-$4500 range. 1 to 5 years old is $3000 to $4000 depending on the floor and view of the Golf Course. $1800 would be on Av. Javier Prado and going towards Lince. I got within the quoted price range for mine which is right on the Golf so this sounds about right.

I was told the location matters apartments in San Isidro apartments closest to or on the Golf are selling after about 150 days if the properly priced at this time. That is what I experienced when I sold. Other apartments are taking anywhere from 150-200 days if priced properly.

Three years ago everything was selling and selling quickly (30 days or less) so the market has slowed here and prices were going up about 15% annually. Many Peruvians who left Europe are returning there and are selling their apartments the only exception would be those who want to return to Spain and Portugal. Peruvians who left the states are returning too but are sometimes renting out their apartments when they are not here. No information on rentals.

It should be interesting to watch and see if the current slowdown is just that a slowdown and if prices start to rise again and sales pickup. Anybody have any experiences?



Thanks for this info DC.. it is difficult to get a bean on what is happening in real estate in Peru. This confirms my assumption on the deceleration of the Peruvian economy. 200 days to sell a property can spell trouble if there is a rush to sell or there is a crisis. I watch all other economic indicators on a frequent basis. Most indicators were on a downward trend. Good to hear straight from a person who is intimately involved. My personal reasons are that I want to buy, but not in a peak market. Want an apartment in LIma, but don't want to lose my shirt down the road.

Today's news:

Seasonally adjusted GDP in March confirmed that there slowdown in the Peruvian economy
Monday, May 19, 2014

ECONOMÍA08: 34
The Peruvian economy faces a fall if left aside in measurement seasonal components as INEI. Dato manufacturing would be a cyclical effect.
Last edited by tupacperu on Mon May 19, 2014 11:28 am, edited 1 time in total.
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Re: Real Estate Prices

Postby tupacperu » Mon May 19, 2014 11:17 am

ironchefchris wrote:As Benjamin Franklin once advised, "Time is money."


Yep! and You get what you pay for....

I used a runner and a real estate agent for my place in Pimentel. Cost me big commissions, but I was a little green when I started. Paying $13K for a beach front is a no brainer. Paid 10% in commissions... had to close quickly before someone else jumped on it, found it in ADOOS.COM.PE :)
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Re: Real Estate Prices

Postby tupacperu » Mon May 19, 2014 11:22 am

DC_20833 wrote:
chi chi wrote:Prices in áreas like Miraflores and San Isidro will go down a lot or will become imposible to sell. The competition from other districts is too tough. Other districts are improving a lot and will be similar to San Isidro and Miraflores son. Miraflores and San Isidro are also known for thick smog, noise, heavy traffic and traffic jams,.


There are three rules in real estate LOCATION, LOCATION and LOCATION. Is traffic a problem in San Isidro and Miraflores? For sure everybody wants to be in those Districts. Shopping options are plentiful and a wide range of options for Dining out. I doubt prices will go down the costs of ownership here is low most people in Miraflores and San Isidro do not have Mortgages. I was speaking with a builder here and he told me 90 percent of the buyers are paying cash it is the same with resales. The monthly maintenance is low when you consider the income levels of the people who live here. In any real estate turn down what causes a deep drop in prices is when people have to sell because they do not want to pay the monthly mortgage anymore so they cut the price. That is not the case in these Districts. What will happen and is happening is people will wait for a buyer or rent the apartment out. Rentals have not slowed here nor has rent gone down and in some cases the rent has gone up.

chi chi wrote:San Isidro and Miraflores can't compete with the benefits that Puente Piedra has to offer.


You are talking about comparing Apples and Oranges Chi Chi. However, to be fair what exactly are the benefits that Puente Piedra have to offer than San Isidro and Miraflores do not have?


Cash buyers are likely to hold out in a deep price drop, hoping for a recovery. if these places were purchased around 2006-2007, they have nothing to lose. There is no motivation to sell if you are mortgage free. I doubt that prices will drop below pre 2006-07 levels. worst case scenario, they will break-even
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Re: Real Estate Prices

Postby tupacperu » Mon May 19, 2014 11:25 am

DC looks like you are making a wise move. Do not mean to pry, but tell me your motivation for selling. It would be interesting to know.

I am keeping my eye out for apts in San Miguel and Magdalena, along the coast and avenida ejercito. I current am selling my commercial/residential property in the suburbs of Philly, waiting to see how thing will pan out in the coming years in Peru. No hurry, I got 6 years before retirement.

IMHO.. I see a correction coming, because consumer demand was a big driver of the economy (GDP) and it has slowed, The BCR dropped reserve requirements for banks to allow more loans, but I doubt if anyone is biting, it seem more like people credit cards and debt are maxed.


Cement which is a primary driver of the housing market has grown but net revenues have fallen:

Turnover of Cementos Pacasmayo grows 4% in first quarter
Tuesday, April 29, 2014

Net revenues and operating profits fell 11.8 % cement company and 5.5 % respectively over the same period last year.

http://gestion.pe/empresas/volumen-vent ... re-2095830
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Re: Real Estate Prices

Postby chi chi » Mon May 19, 2014 2:08 pm

DC_20833 wrote:This is totally off topic the subject here is Real Estate Prices and the current market conditions in San Isidro and MIraflores and the benefits the Districts offer.


Expats aren't interested in Miraflores and San Isidro. Few expats live in those districts. Only the new gringo in town will move there but once he ventures in the other districts he will find out that he has been charged a ripp off rent and moves out to a better área.
No decent mercado, no metrorail, overcrowded public transport, smog, heavy traffic and gringos get charged inflated prices in San Isidro and Miraflores. 15 years ago, those áreas might have been the nicest ones but other districts have improved and are getting better than Miraflores and San Isidro.

Almost every building in Miraflores and San Isidro has one or more signs saying ''se vende'' or ''se alquilo'' behind the window or on the balcony. If those districts were that good then people wouldn't run out of them.

I live in an área much nicer than San Isidro. Mountainview, in front of the river, very quiet, nice sunny weather, no smog at all and very safe. My motorbike is parked on the street and the keys are on it. No metal bars in front of my windows and my front door is open all day. Could you do that in San Isidro?
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Re: Real Estate Prices

Postby DC_20833 » Mon May 19, 2014 2:42 pm

Two things are motivating my sale of properties here. Last year, I saw the beginning signs of a slowdown in early 2013. The time on the market for properties in San Isidro and Miraflores started to increase then I saw the number of problem loans jump. Property values here skyrocketed since 2006 and what goes up will go down real estate investing has cycles. Also, other markets present far greater opportunities for appreciation so it is time to move on.

Finally, on a personal basis the cost of living here is outrageous when you look at what you are getting for it. You combine that with the fact the price boom is over or at least cooled it is time to move on.
Last edited by DC_20833 on Mon May 19, 2014 2:55 pm, edited 1 time in total.
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Re: Real Estate Prices

Postby DC_20833 » Mon May 19, 2014 2:53 pm

Thank you, very much Chi chi for your opinion I am happy to see that you are discussing the topic here again. However, you forgot to reply to my question regarding this statement made by you so people can make an informed decision regarding the advice given by your girlfriend.

DC_20833 wrote:
Chi Chi wrote:My gf told me that using an agency is a ripp off. Why paying thousands of soles whilst you can put a free add on websites like olx.com.pe, adondevivir.com and urbania.pe?


Great information Chi Chi. What are your girlfriends professional qualifications and experience to give such advice?
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Re: Real Estate Prices

Postby chi chi » Mon May 19, 2014 3:17 pm

DC_20833 wrote:Two things are motivating my sale of properties here. Last year, I saw the beginning signs of a slowdown in early 2013. The time on the market for properties in San Isidro and Miraflores started to increase then I saw the number of problem loans jump. Property values here skyrocketed since 2006 and what goes up will go down real estate investing has cycles. Also, other markets present far greater opportunities for appreciation so it is time to move on.

Finally, on a personal basis the cost of living here is outrageous when you look at what you are getting for it. You combine that with the fact the price boom is over or at least cooled it is time to move on.


Prices in San Isidro and Miraflores are indeed exagerated and will go down as other districts become more popular and look nicer. Those new buildings in S. Isidro and M.F. look nice when new but a few months later they are covered in thick smog, the windows are always dirty and mold forms on walls and ceilings.
You get charged more for wáter, electricity, arbitrios, etc. than in other districts.

Prices in áreas like Puenta Piedra, Ate Vitarte, Comas and Independencia will continue to rise as those áreas are popular. They will become the best and nicest districts in a few years time. San Isidro and Miraflores will become forgotton glories.
That's why the government is improving public transport in those upcoming áreas. The Metrorail is one of the best and nicest metros in the world. The Metropolitana is an excellent bussystem. But they don't run trough M.F and S.I.



We've just been to our flat in Puenta Piedra and we visited the Plaza Norte shopping center in Independencia. It's much bigger and nicer than Jockey Plaza.
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Re: Real Estate Prices

Postby tupacperu » Mon May 19, 2014 8:53 pm

DC_20833 wrote:Two things are motivatingd sale of properties here. Last year, I saw the beginning signs of a slowdown in early 2013. The time on the market for properties in San Isidro and Miraflores started to increase then I saw the number of problem loans jump. Property values here skyrocketed since 2006 and what goes up will go down real estate investing has cycles. Also, other markets present far greater opportunities for appreciation so it is time to move on.

Finally, on a personal basis the cost of living here is outrageous when you look at what you are getting for it. You combine that with the fact the price boom is over or at least cooled it is time to move on.


Thanks DC for sharing. You are seeing what I have been seeing in the last few years. This is why I put buying on hold. Just following the Peruvian financial rags you could see the downward trends across industries.

Appreciate that bit of information
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Re: Real Estate Prices

Postby Bobby » Tue May 20, 2014 9:40 pm

I have a different opinion about what's going on in Lima:

1. Sure, since 2010 real estate investment stopped to be attractive as prices have skyrocketed. Now, the increase of the sqm value is very moderate (in upper scale districts) but not negative and still slightly above inflation.

2. Formal employment (middle class workers) has expanded over the last decade and there is still a great demand for loans and housing.

3. Some districts are becoming more popular (San Miguel, Ate) for the middle class and some districts are becoming even more exclusive as prices remain high (Barranco, Miraflores, San Isidro) and continue to go up. There is less land to build in these exclusive areas so if you want to open a business or simply live there you will have to pay the price. Fewer people can afford today to buy there (as pointed out by the OP in the selling cycles in days) as in the previous years but the market is maybe much smaller then before but still working great (e,g, there are more Kia buyers than Mercedes but it doesn't mean that Mercedes will eventually go out of business as their value increase).

4. Finally, there is no simple and straightforward relation between an economy and real estate. In some Europeen countries like France and the UK despite the financial crisis of 2008, 2010 housing prices still continued to grow above inflation and salaries. The contrary happened in Spain and Greece. In Venezuela and Argentina despite great crisis housing prices continues to go up (as irrational as it might seem). So I believe that if a major crises was to hit Peru (financial, political, natural disaster) Miraflores and San Isidro will remain the heart of Lima and buying or selling an apartment has a relative small risk (in price variation) whereas it will not be the case in areas like Ate, San Miguel, Chorillos.
Small apartments are sold much quicker than bigger ones. I believe it takes probably a longer time to sell a 90sqm in Ate (e.g. Salamanca) than a overpriced 50sqm apartment in Miraflores...
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Re: Real Estate Prices

Postby DC_20833 » Tue May 20, 2014 10:11 pm

Bobby wrote:3. Some districts are becoming more popular (San Miguel, Ate) for the middle class and some districts are becoming even more exclusive as prices remain high (Barranco, Miraflores, San Isidro) and continue to go up. There is less land to build in these exclusive areas so if you want to open a business or simply live there you will have to pay the price. Fewer people can afford today to buy there (as pointed out by the OP in the selling cycles in days) as in the previous years but the market is maybe much smaller then before but still working great (e,g, there are more Kia buyers than Mercedes but it doesn't mean that Mercedes will eventually go out of business as their value increase).


That is an interesting view point. In Miraflores they are running out of land facing the Ocean I believe there is one or two buildings be currently marketed and the sales are brisk. It really comes down to the three L`s. If you look at the GFC and how it effected prices in South Florida properties in the more fashionable area slowed but never really came down in price. So location matters. I think the days of double digit appreciation in Miraflores and San Isidro are coming to an end but I do see a more reasonable rate of appreciation. The thing that makes it hard to get a reading is there is no MLS in Peru where sales prices are reported you have to go to SUNARP and many times sale prices are lowered so the seller pays a lower tax. BBVA Banco Continental looks at what amount is financed in reporting their numbers and I believe the banks share that information.

Will they eventually run out of buyers in Miraflores and San Isidro? Highly unlikely. The component that is missing now are the investors. Many Peruvians were buying apartments to rent out and that is not happening anymore or not as much. I remember back as late as 2012 and 2013 a building would approach completion and you would see several signs offering the apartment for rent today no where near as many. Also, I think you are seeing investors cash out because they have seen a great return and when they decide to sell they no longer rent the apartments so the supply of rentals is decreasing but the market for rentals is about the same from what I see.
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Re: Real Estate Prices

Postby Sergio Bernales » Fri May 23, 2014 10:51 am

Lloyd007 wrote:This is an excellent post and yes, the market has slowed a lot I think. About 2 years ago I sold a property in about 2 weeks. Maybe I should have asked for more...!?!

Nowadays, second hand and older apartments are taking longer to shift and I also think that some prices are massively inflated. For example, a street that runs parellel to av. Ejercito in Miraflores is called Mendiburu and has a lot of combi traffic and a market. I called about an apartment that had an ad in the window (purely out of curiosity) and they were asking US$179,000 for an 83 sq.m apartment. That's US$2150 per meter. And no parking space. And No deposito = insane! They will never sell it being so greedy and unrealistic.

Getting a good deal or a bargain is virtually impossible. The new, large apartments on the Malecon Miraflores (towards Parque Mria Reiche, not Larcomar end, which I don't know much about)are around US$1 million. What's odd is that they are all sold before they are even built. Who is buying them? What do they do for a living?


Hi Lloyd, I don't want to depress you, but if it's a relatively new build, then that price is more or less what people are asking for in the area. Now, whether they're getting that or not, I don't know. And whether the doomsayers with their crystal balls are right and that there is about to be a big market correction, I also have no idea. The problem with the property market is no one can predict it with any accuracy. Even if there is a bubble and prices are inflated, it can take years for it to burst...or it can burst tomorrow.
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Re: Real Estate Prices

Postby Bobby » Mon May 26, 2014 6:41 pm

On topic article from Gestion in Spanish (check the link to download the study). What it interesting is that content is based on a quatitative approach so a bit less subject to perceptions....

http://gestion.pe/economia/precio-vivie ... do-2098374
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Re: Real Estate Prices

Postby tupacperu » Tue May 27, 2014 8:50 am

No one wants to talk about the Elephant in the Room or the King's new clothing. This would cause a domino effect should the newspapers go down that path. The press does not want to trigger a crisis, it is against their interest. Pretty much we will be caught by surprise when it happens. My opinion is that real estate is overvalued and there is going to be a correction. Peruvians are coming to the end of their credit boom. The problem is not so much about overvalued by itself, it is more about sustaining middle class employment in Peru. GDP is decelerating which can have a direct affect on employment. Historically in the last 5 years, GDP was driven by consumer demand. Judging by the article below, Peru is in a pre-crisis.

France and the UK are players of major European economies. Spain is half the economy compared to UK or France,, Greece is not even close. Peru does not have that type of resilience to recuperate like the european union. The economies of EUs major powers has a diverse economy, where as Peru is an export economy with primary resources (mining).

Venezuela and Argentina have poor monetary policy and that is what is causing economic issues. Their economies are strong, driven by oil in Venezuela and a diverse economy in Argentina.

Below is an indicator of things to come. The New Peruvian New Middle Class had it's first experience with credit and like most with new credit, thing are getting out of hand.



http://www.eleconomistaamerica.pe/econo ... 84pebN3hw3

Peruvian families debt exceeds 2.3 times its revenues Central Bank warns
elEconomistaAmerica - 10:36 - 26/05/2014
Last edited by tupacperu on Tue May 27, 2014 9:22 am, edited 4 times in total.
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Re: Real Estate Prices

Postby Guiri » Tue May 27, 2014 9:17 am

Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:
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Re: Real Estate Prices

Postby tupacperu » Tue May 27, 2014 9:20 am

Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree
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Re: Real Estate Prices

Postby tupacperu » Tue May 27, 2014 9:39 am

Sergio Bernales wrote:
Lloyd007 wrote:This is an excellent post and yes, the market has slowed a lot I think. About 2 years ago I sold a property in about 2 weeks. Maybe I should have asked for more...!?!

Nowadays, second hand and older apartments are taking longer to shift and I also think that some prices are massively inflated. For example, a street that runs parellel to av. Ejercito in Miraflores is called Mendiburu and has a lot of combi traffic and a market. I called about an apartment that had an ad in the window (purely out of curiosity) and they were asking US$179,000 for an 83 sq.m apartment. That's US$2150 per meter. And no parking space. And No deposito = insane! They will never sell it being so greedy and unrealistic.

Getting a good deal or a bargain is virtually impossible. The new, large apartments on the Malecon Miraflores (towards Parque Mria Reiche, not Larcomar end, which I don't know much about)are around US$1 million. What's odd is that they are all sold before they are even built. Who is buying them? What do they do for a living?


Hi Lloyd, I don't want to depress you, but if it's a relatively new build, then that price is more or less what people are asking for in the area. Now, whether they're getting that or not, I don't know. And whether the doomsayers with their crystal balls are right and that there is about to be a big market correction, I also have no idea. The problem with the property market is no one can predict it with any accuracy. Even if there is a bubble and prices are inflated, it can take years for it to burst...or it can burst tomorrow.


Agree... there is a correction coming... from what I see in the next 2-3 years. With China pulling back and QE pull back, they have yet to raise interest rate, Peru is on a collision course, soft or hard looks like it's coming down the pike. In boom times the news papers were on fire with articles about housing and the economy , upbeat. Now, many article are indicating downward pressure on the economy.

Money Laundering laws are lax in Peru... a haven for dirty money..

South Florida's real estate is mostly driven by dirty money, much like Peru: A March story in Property Week said the "dark age" of the 2009 crash was over: "Fewer than ten percent of downtown Miami units are left and they're going fast. Meanwhile, super-luxury penthouses at the exclusive southern tip of South Beach…are selling for $25 million."

This remarkable boom in high-end real estate has been driven by foreign money, with "buyers coming from all over the world but with the highest concentration from Venezuela, Argentina, Brazil and Russia," according to the website for Miami Condo Investments, which offers high-end properties for sale. Twenty-six percent of real estate sales to foreigners in the United States occur in Florida, more than anywhere else in the country and twice as high as second-place California, according to the National Association of Realtors. Seventy-six percent of condo buyers in Miami don't take out mortgages but pay cash, versus a national average of 32 percent for cash sales for all properties.

Obviously not all of the money flowing into Miami from abroad is illegitimate. Yet there are abundant signs — beyond the city's traditional role as a repository for dirty cash and the fact that much of the inflow is from countries particularly rife with corruption — that significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.
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Re: Real Estate Prices

Postby Bobby » Tue May 27, 2014 12:17 pm

tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.
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Re: Real Estate Prices

Postby Alpineprince » Tue May 27, 2014 3:01 pm

Bobby wrote:You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.

I read the article, but did not have time to post and thank you the other day. I realize people are allowed to post opinions on here all day long, It is nice every once and awhile somebody has something more substantive to post. As a long term investor here, I will keep my opinion to myself and hope we all continue to prosper along with our Peruvian brothers.
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Re: Real Estate Prices

Postby Sergio Bernales » Wed May 28, 2014 11:14 am

Bobby wrote:
tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.


Hi, Bobby, do you know where I could get a copy of this report? I've done a couple of Google searches and so far I've found general reports on the economy, but none specifically aimed at the housing market. I'll keep searching in the meantime.

I'm particularly interested in where they think the market is heading for property in the mid-market, new blocks in less glamorous areas of Lima.
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Re: Real Estate Prices

Postby Bobby » Wed May 28, 2014 3:48 pm

Sergio Bernales wrote:
Bobby wrote:
tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.


Hi, Bobby, do you know where I could get a copy of this report? I've done a couple of Google searches and so far I've found general reports on the economy, but none specifically aimed at the housing market. I'll keep searching in the meantime.

I'm particularly interested in where they think the market is heading for property in the mid-market, new blocks in less glamorous areas of Lima.


Hi Sergio. Here is the link: http://gestion2.e3.pe/doc/0/0/0/4/9/49430.pdf
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Re: Real Estate Prices

Postby DC_20833 » Wed May 28, 2014 6:13 pm

Bobby wrote:
Sergio Bernales wrote:
Bobby wrote:
tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.


Hi, Bobby, do you know where I could get a copy of this report? I've done a couple of Google searches and so far I've found general reports on the economy, but none specifically aimed at the housing market. I'll keep searching in the meantime.

I'm particularly interested in where they think the market is heading for property in the mid-market, new blocks in less glamorous areas of Lima.


Thanks Bobby I am getting my Assistant to translate it now.

Hi Sergio. Here is the link: http://gestion2.e3.pe/doc/0/0/0/4/9/49430.pdf
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Re: Real Estate Prices

Postby Sergio Bernales » Wed May 28, 2014 6:58 pm

Bobby wrote:
Sergio Bernales wrote:
Bobby wrote:
tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.


Hi, Bobby, do you know where I could get a copy of this report? I've done a couple of Google searches and so far I've found general reports on the economy, but none specifically aimed at the housing market. I'll keep searching in the meantime.

I'm particularly interested in where they think the market is heading for property in the mid-market, new blocks in less glamorous areas of Lima.


Hi Sergio. Here is the link: http://gestion2.e3.pe/doc/0/0/0/4/9/49430.pdf


Many thanks, Bobby. Much appreciated.
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Re: Real Estate Prices

Postby tupacperu » Thu May 29, 2014 7:24 am

Sergio Bernales wrote:
Bobby wrote:
tupacperu wrote:
Guiri wrote:Like I said in the other post...it is all very similar to Spain...and we know how that ended :roll:


I agree


You might be right....I really don't know. However it seems you guys haven't taken a look to the quantitative study of the Banco Central de Reservas reported by Gestion. Perception based analysis or arguing with very general facts are easily biased ones.


Hi, Bobby, do you know where I could get a copy of this report? I've done a couple of Google searches and so far I've found general reports on the economy, but none specifically aimed at the housing market. I'll keep searching in the meantime.

I'm particularly interested in where they think the market is heading for property in the mid-market, new blocks in less glamorous areas of Lima.


Read the report, one cannot specifically focus on housing prices without taking into account other factors in the economy. Banco Central de Reserva position is to keep a positive outlook on the economy. Numbers do not always reflect reality. Consumer demand has fallen, which was a major driver of GDP. The Central bank has been dropping reserve requirement for banks to pump some life into consumer demand. The one unknown factor is how US interest rate will affect the Peruvian economy when QE has raised rates. The impact of that along with deceleration is kind of an unknown scenario but it does not put the Peruvian economy in a positive light. From what I am reading and the various analysis of Peruvian economist, growth is not expected to be above 5% or even go to 6%, 7% or higher, those days are over. There are plenty of articles regarding how to manage credit (personal), seem there is a crisis in that area, but banks continue to lend. The Municipal Bank of Pisco is a warning shot, regarding credit worthiness, though many say it is an isolated incident.. I take the other route.. an indication of things to come. Credit is new to many Peruvians and as witness in grocery stores and the like, it is used very loosely. As in economics and any other prediction, there is a big unknown as to how things will pan out. But given the history of many countries including the US, there are boom and bust cycles in most economies and Peru is not immune. The big question is if they can manage the bust properly to prevent major damage.


I admit to being a little bias for self interest, but there is not much positive news coming out of Peruvian economy at this time. A failing bank is not a good sign to me. It is a microcosm of what is going on behind close door. Damage control to avoid a panic or a run on banks.
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Re: Real Estate Prices

Postby tupacperu » Thu May 29, 2014 7:58 am

http://gestion.pe/inmobiliaria/precio-v ... os-2098533

Lima housing price rose 251% in last 7 years
Tuesday, May 27, 2014

INMOBILIARIA14 : 09
According to a working paper of the BCR , the price per m2 in the urban areas of Lima has escalated to unprecedented levels , however this price would be found not misaligned with respect to its foundations.



In recent years , the average price per square meter ( m2) of households in urban areas of Lima and rose from U.S. $ 521 U.S. dollars at end- 2006 to U.S. $ 1.838 U.S. dollars at the end of 2013, according to a working paper published by the Central Reserve Bank ( BCR) . This implies a growth in housing prices of 251 %.

According to the document , " the dollar price has been increased to an average of 20 % annually in recent years."

Despite this, the document author , Fabrizio Orrego says the price per m2 of housing in Lima is not misaligned with respect to its foundations.

This finding is consistent with a previous study of the BCR , which argues that despite the increase in housing prices , the price - rent ratio is maintained within the range commonly used in the literature to describe normal situations.

Coincides with BBVA , who estimates that the observed level of housing prices is not far from its fundamental value , ie there is no risk of overvaluation .

Regarding the existence of a housing bubble at present, the study avoids referring to the existence or non-existence of one, and simply refers to the price per m2 misalignment
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Re: Real Estate Prices

Postby Bobby » Thu Jun 19, 2014 10:11 am

Published today in El Comercio: average price per sqm2 in Lima districts: http://elcomercio.pe/economia/peru/cono ... ia-1737199
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Re: Real Estate Prices

Postby Sergio Bernales » Thu Jun 19, 2014 1:03 pm

Bobby wrote:Published today in El Comercio: average price per sqm2 in Lima districts: http://elcomercio.pe/economia/peru/cono ... ia-1737199


Really interesting to know. Thanks for posting, Bobby.
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Re: Real Estate Prices

Postby chi chi » Thu Jun 19, 2014 4:48 pm

Bobby wrote:Published today in El Comercio: average price per sqm2 in Lima districts: http://elcomercio.pe/economia/peru/cono ... ia-1737199


Sounds like we have to move to Villa Maria de Triunfo, San Juan de Miraflores or Carabayllo because that's where the cheapest properties are.

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