Peru’s real-estate prices have most probably reached their peak, and will not continue to increase as they have in recent years, according to Banco de Credito del Peru, reported daily La Republica.
“Prices increased because in Peru, the square meter of land cost less than in other countries in Latin America, such as Chile and Colombia,” said Lussiana Villena, a specialist at the Banco de Credito.
Villena said that four years ago, the average price of land in Peru was about $500 per square meter, while in other countries the average price was between $1,500-$2,000.
“It has now made up that difference, and it will be difficult for it to continue increasing,” Villena said.
The quick rise in Peru’s real-estate prices led some observers to raise concerns about the possibility of a housing bubble.
Economist Jorge Munoz, from the Arequipa Association of Economists, said he does not see a bubble in the region’s real-estate market.
“That occurs when there is excessive demand, and in the sectors A and B (upper and middle class), that is no longer a phenomenon,” he said. There is still unmet demand in lower-class sectors, “but it isn’t an over-demand,” he added.