PERU: An Introduction to Real Estate
The following overview featured in Chambers Latin America 2025 and is awaiting update from the firm.
Peru: Real Estate Market Outlook for 2024–2025
Current economic conditions in the real estate sector
In 2024, the reduction of interest rates implemented by the Central Reserve Bank (BCR) and the availability of up to 25% of the pension fund for the purchase of a first property (or the repayment of a mortgage loan for the purchase of the same) will be key factors in boosting the real estate sector. Similarly, the recent recovery in the pace of mortgage placements using resources from the MiVivienda Fund (FMV) will allow the sector's dynamism to be maintained.
New legislation impacting clients
Legislative Decree No. 1595 (Property Rights Regularization Law) has established a new regulatory framework that consolidates and generalizes existing special regulations and jurisprudential criteria on the regularisation of private urban property rights concerning the physical characteristics of urban properties, urban zoning, and buildings. Non-contentious matters within notarial jurisdiction, already regulated in Laws No. 27157 and No. 27333, have been incorporated into a single regulatory framework, with application limited to properties located in urban areas that have an approved urban zoning license.
Meanwhile, Legislative Decree No. 1568 (New Horizontal Property Regime) aims to regulate the horizontal property regime for buildings—urban or rural—in which there are individually owned units that share common assets and services. This is to promote harmonious cohabitation among owners and improve the management and use of the building complex. In this regard, one of the main measures is the establishment of a Maintenance Fee Debtors Registry under the Ministry of Housing, and the registration of maintenance fee debts in the property registry entries of individually owned units.
The role of the Competition Authority in protecting real estate investments
In recent months, municipal authorities in Lima Moderna (Wealthy sector of Lima) districts (Miraflores, San Isidro, Santiago de Surco, among others) have adopted a stance resistant to large-scale projects within their jurisdictions. In response to arbitrary municipal actions that undermine legal certainty in the real estate sector, various developers and real estate associations have turned to the Competition Authority to remove any municipal obstacles that affect construction processes and consequently delay the execution of real estate projects in their portfolios. Pursuant to Legislative Decree No. 1256 (Law on the Prevention and Elimination of Bureaucratic Barriers), the Competition Authority has declared certain requirements, limitations, and prohibitions illegal or unreasonable, as they unjustly restrict the rights of private initiative and business freedom for various real estate developers.
As a first example, we can cite Resolution No. 0565-2024/SEL-INDECOPI, which declares as illegal bureaucratic barriers the measures contained in Ordinance No. 585-MSI regarding (i) the prohibition on submitting preliminary project consultations or construction licenses linked to Social Housing projects, and (ii) the suspension of administrative procedures for Social Housing projects that are subject to a judicial process and/or awaiting a decision from the Ministry of Housing. As a second example, through Resolution No. 0585-2024/SEL-INDECOPI, the Competition Authority declared as illegal bureaucratic barriers the provision in Ordinance No. 618-MM that restricts the participation of urban reviewers in evaluating technical files submitted for the construction of sustainable buildings.
The recent Constitutional Court ruling and its impact on the promotion of social interest housing (VIS)
Recently, the Constitutional Court, in enforcing its decision in Judgment No. 302/2023 (Case of Urban Planning Standards II), declared the Legal Technical Report No. 063-2023-VIVIENDA null and void, thus clarifying the retroactive and nullifying nature of the judgment concerning administrative acts enacted under Supreme Decree No. 010-2018-VIVIENDA and its amendments. Similarly, the Court invalidated several provisions of Supreme Decree No. 006-2023-VIVIENDA (VIS Regulations), as it considers that these provisions regulate urban planning and construction matters that fall exclusively within the jurisdiction of provincial municipalities, as previously established in the judgment.
The Constitutional Court’s recent ruling not only implies that projects seeking approval under the current VIS Regulations will no longer benefit from the special parameters provided by this regulation for such projects (such as height, percentages of total usable area for VIS, among others), but also that judicial bodies may declare the nullity of building permits if the preliminary design or project adhered to regulations nullified by the Court—provided no third-party rights are involved. In short, the multiple scenarios stemming from the nullifying effect of this enforcement ruling significantly undermine legal certainty in the real estate sector, thereby discouraging investment in VIS projects. Furthermore, the effects of this decision extend to individuals who may have purchased real estate units within these projects, potentially affecting their right to dignified housing.
It is worth noting that, in practical terms, this issue is limited to projects approved before the Constitutional Court’s Judgment in the aforementioned districts of the capital city. The Housing sector has initiated working groups between municipalities and developers to seek solutions to the disputes that have arisen. Additionally, it is expected that VIS project developers may redirect investments to other districts and encourage state authorities to commit to developing urban infrastructure and more efficient public services in those areas.