Peru- This two-story, five-bedroom four-bath Mediterranean-style home is on a hill in Casuarinas, a gated neighborhood in the central Lima district of Santiago de Surco. The house was built in 1970, with broad arches, rustic doors, stone floors and other distinctive style elements.

The house sits on 0.7 acre and faces northwest, offering wide city views. The main entrance features a tall antique wooden door, which leads to a two-story reception hall. The walls are made with brick and mortar and coated with a mixture of lime and carpenter’s glue as part of the Mediterranean look, the owner said.

The living room and the main dining room have bleached, rustic wood floors. One of the home’s special features is an iron chimney in the living room designed by the Peruvian artist Víctor Delfín, which radiates heat throughout the house. Glass doors in the dining room and living room lead to the garden.

The dining room was renovated in 1980 and features a chandelier and room for a piano. The furniture is not included in the sales price, but some pieces are negotiable, including the 12-foot-long dining table, the owner said.

There are three bedrooms on the ground floor, including one with an en-suite bathroom. The other two bedrooms share a bathroom. The kitchen is off the entrance hall, and there is a separate laundry room next to the garage.

The master bedroom is on the second floor, reached by a slim staircase off the entrance hall. There is an antique bathtub in the master bedroom’s bathroom, which is surrounded by a circular wall and a glass roof. There is a covered terrace off the master bedroom with city views.

There is also a guest room on the second floor with a bathroom and its own terrace, which can be reached by a staircase outside of the house. The garden is about 1,075 square feet and contains vines and trees that have been allowed to grow naturally on the hillside to attract birds, the owner said. There is also a vegetable garden.
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Santiago de Surco, also known simply as “Surco,” is one of the few areas in Lima with more single-family homes than apartment buildings, said Miguel Barragan, the owner of RE/MAX Royal, the Lima real estate company listing the property. “It’s a great place for jogging, walking and cycling,” he said. Several large shopping centers and neighborhoods with restaurants and night life are within a short drive of the house.

The Jorge Chávez International Airport is about a 45-minute drive from the house.

MARKET OVERVIEW

Sales in Lima have been slow for the last year, agents say. There is no official government data tracking real estate, but prices dropped as much as 30 percent in some neighborhoods after hitting a peak in 2014, said Nella Pinto, general manager and an owner of Peru Sotheby’s International Realty.

The higher end of the market has been particularly slow, after years of new construction, she said.

Peru was one of the fastest-growing economies in Latin America from 2003 to 2013, according to the World Bank. Real estate prices almost doubled from 2009 to 2013, agents said.

But political uncertainty, rising crime and a sluggish economy have weighed on the market. Economic growth fell to only 2.4 percent in 2014, with only a slight rebound to 3.3 percent in 2015, primarily because of a slowdown in the mining industry, according to the World Bank.

In June, Pedro Pablo Kuczynski, an economist and former Wall Street banker, won the presidency after a contentious election, promising to improve the business environment. “There is palpable new optimism in Peru” about the economy and foreign investment, said Tim Brace, the general manager of Live in Lima, a real estate company.

Sales have already picked up in recent months, agents said. “Also, the prices are increasing and there will be no reduction on them this year,” Mr. Barragan said.

The waterfront neighborhood of Miraflores and the financial district of San Isidro are the most popular with buyers these days, according to agents. Prices in Miraflores average about $2,500 a square meter ($233 a square foot), compared with $2,900 a square meter ($270 a square foot) in San Isidro and $1,900 a square meter ($177 a square foot) in the much larger and more diverse Sucro, Mr. Barragan said.

WHO BUYS IN LIMA

Peru’s fast-growing middle class was the main force behind the latest housing boom, agents said. The strongest demand is for homes under $100,000, according to Mr. Brace. There has been a drop in foreign buyers in the last two years, but Peru still attracts a wide variety of international companies, with employees looking to settle in Lima, particularly from China, Chile and Spain, Ms. Pinto said.

Mr. Brace’s clientele also includes retirees from the United States, Britain and Australia.

BUYING BASICS

Some of the mechanics of sales in Peru will be familiar to international buyers, agents said. There are no restrictions on foreign ownership of property, except near borders and military bases. And home prices are routinely listed in United States dollars.

But many aspects of a purchase are different. A notary handles most of the mechanics of a sale, though agents encourage buyers to hire a lawyer to represent their interests. There is no traditional title process, making it difficult to track the legitimate owners, Mr. Brace said. Arranging financing is also very difficult for noncitizens, agents said.

Sellers are usually represented by an agent, but exclusive listings are rare, making it difficult to determine the best contact for a given property. “Very often 10 or more agents will have a listing,” Mr. Brace said. “With some properties it can be very much a crapshoot who will end up selling it in the end.” (This property is an exclusive listing, Mr. Barragan said.)

With no official sales data available, prices can be all over the map, and final sales prices are often well below listing prices, agents said.

TAXES AND FEES

Buyers must pay a transfer tax, known as alcabala, which is 3 percent of the final sales price. Notary fees, also paid by the buyer, usually total about $500 to $1,000, Mr. Brace said. Agent fees are usually 3 percent of the sales price and split between the buyer’s and seller’s agents, he said.

The annual local property tax on this home is about $1,000, Mr. Barragan said. The capital gains tax on the sale of property for nonresidents can be as high as 30 percent, but there are exceptions that can lower it to 5 percent or less, agents said.