The increase in housing prices in Peru this year will likely be far less than in 2012, a former top government official said.
Guido Valdivia, a former deputy housing minister, saidhe expects housing prices to rise less than 10 percent in 2013, which would be lower than the 20 percent rise last year, financial daily Gestion reported.
Housing prices have boomed due to strong demand as Peruvians have profited from an economic expansion that has put more money in their pockets and given them better access to consumer credit.
However, some economists say that the recent increase in prices is unsustainable. A local consulting firm said last month that the number of mortgages in alert posted a dramatic rise last year, suggesting that some borrowers are having difficulty making payments on their mortgages.
“Middle income families have made a great effort to acquire housing,” Valdivia said. “If prices continue increasing 20 percent annually like in 2012, the market will be restricted.”
Peru’s GDP is expected to grow by more than 6 percent in 2013.