House Hunting in ... Peru

It always fascinates me to see some of the high prices in other countries. I never got a chance to comment on the Portugal post about the Lapa district, which is described as one of Lisbon's most affluent areas. Prices are high there, but I can kind of understand it as it is western Europe and it's a historic district, which obviously is something that I value. Now, no offense to Peru and its lovely people, especially since I spent a very enjoyable vacation there a few years back, but after being in Peru it's hard for me to visualize any place there that would fetch a million dollars. It just goes to show there's wealthy people everywhere and it's all relative. I suppose when the market was hot here in Savannah or at Tybee Island people looked at certain properties and thought that there was no way anything in Savannah should be worth $1,000,000. So please Peruvians, don't go there, because I already said it myself.

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By VIRGINIA C. McGUIRE
Published: February 2, 2011

A FOUR-BEDROOM HOUSE WITH A THREE-BEDROOM COTTAGE IN CHORILLOS, PERU

$900,000

This property is part of La Encantada de Villa, an oceanfront gated community with a country club, outside Chorillos a town 20 minutes from Lima with a large international community.

Both structures were renovated last year; among the improvements were closets and paneling made of Peruvian jungle hardwood and reclaimed pine. In the main house, the living room has double-height ceilings and a stained-glass window. The carved mantelpiece over the dining room fireplace is over 100 years old. The house has one bedroom upstairs and three on the main floor.

The master bedroom is in the cottage at the back of the property. The master bath is en-suite, and the floors and walls are lined with pink ceramic tile. Both houses are decorated with antique stained glass, plaster ornaments and local textiles. The pool area is landscaped with bougainvillea and palm trees.

Jorge Chávez International Airport is a 40-minute drive.

MARKET OVERVIEW

Growth in Peru’s real estate market has remained steady over the past five years, despite the global economic downturn, said José Antonio Olaechea, managing partner of Estudio Olaechea, a law firm in Lima. He said that although high demand and a low housing supply were pushing prices up, stagnant wages were preventing out-of-control growth. “We are not yet in a bubble,” he said, adding that government programs to promote homeownership have help bolster the market.

In addition, the shortage of land available for development has spurred apartment and office conversions of many older houses, said Nella Ponce, the director of Peru Sotheby’s International Realty in Lima.

Growth is especially strong in Miraflores and Barranco, affluent districts along Lima’s Pacific Coast. New homes in Miraflores sell for $2,000 a square meter ($186 a square foot, at 10.7639 square feet to the square meter). Recently homes in a sold-out development in Barranco sold for $2,500 per square meter.

Second homes along the private beaches outside Lima cost $1,000 to $1,500 a square meter, Ms. Ponce said. In Chorillos, once a second-home destination but now largely a bedroom community, property sells for $1,500 to $2,000 a square meter. The house profiled here costs $1,125 a square meter, slightly less than average, because the nearest beach is rougher and not ideal for swimming.

Mr. Olaechea says prices are expected to rise by 10 percent in the Lima metropolitan area in 2011, versus 9.5 percent in 2010 and 12 percent in 2009.

WHO BUYS IN PERU

About 40 percent of the country’s foreign buyers are from Argentina, Mr. Olaechea said. Fifty percent are Chileans, Bolivians, Colombians and Brazilians; most remaining foreign buyers are American.

BUYING BASICS

Generally, there are no restrictions on foreigners wishing to buy property in Peru, unless it is within 50 kilometers (about 30 miles) of the border.

Additional costs include a title check, notary fees and deed registration (around $1,500). Foreign buyers must apply for a real estate transaction permit from the Department of Immigration; permits cost $200 to $300, Mr. Olaechea said. Transfer taxes are 3 percent of the purchase price, according to Víctor Manuel Saldaña, the general manager of Alfredo Graf y Asociados, a real estate company in Lima.

Real estate in Peru is almost always priced in United States dollars, Ms. Ponce said. WEB SITES

Peruvian government: www.peru.gob.pe

Municipality of Lima: munlima.gob.pe

Tecnología (online news site): tecnologia.com.pe

LANGUAGES AND CURRENCY

Spanish; Nuevo sol (1 sol = $0.36)

TAXES AND FEES

Property taxes are a $1,200 a year.

View original article: http://www.nytimes.com/2011/02/03/greathomesanddestinations/03gh-househunting.html?_r=1