Thursday, July 11, 2013

Lima Cost of Living: Grocery Prices Compared to the United States

One of Lima's great virtues is a low cost-of-living. The major expenses of life are housing, discussed in detail, and food, which I will analyze here. Restaurant prices are incomparably cheaper in Lima, with good meals generally being less than $5 with tax and tip, and as low as $2. The situation with groceries is a little bit more complicated, however.

The good news is that staple foods and fruits and vegetables are still far cheaper. Peru's fertile, equatorial climate means that crops are grown year-round. When we visited a friends farm a few hours north of Lima, near Barranca, we returned laden with enough watermelons, passionfruit, mangoes and bananas to last for weeks. However, dairy is only a little cheaper, and processed and imported foods are actually more expensive, as are northern fruits like strawberries, raspberries and blueberries. This means that if you cook and eat fresh food, you'll definitely save money moving to Lima. However, if you rely on breakfast cereal and TV dinners (and who hasn't, in their heady younger days?), you'd be better off staying in Akron.

The cheapest grocery stores in Lima are generally Tottus (which I'm such a big fan of that people make fun of me for it) and Metro (often better for fresh fruits and vegetables). Geek that I am, I compared prices at these stores to data from the United States Department of Agriculture and Bureau of Labor Statistics to draw a true apples to apples comparison between food prices in Lima and the United States.

Price Comparison List 
Italics for items cheaper in the US

                                                      Lima                                       United States
Starches (25% cheaper)
Rice                                              $0.36/lb                                       $0.70/lb
Potatoes                                        $0.29/lb                                       $0.64/lb
Flour                                            $0.68/lb (not sold in bulk)           $0.53/lb
Lentils                                           $0.49/lb                                        $1.02/lb
Quinoa                                          $1.45/lb                                        $4.50/lb
Sliced Bread                                 $1.26/lb                                        $1.40/lb
Breakfast Cereal                          $3.26/lb                                        $2.49/lb

Fruit/Vegetables (49% cheaper)
Tomatoes                                     $0.32/lb                                         $1.45/lb
Avocado                                      $0.32/lb                                         $2.50/lb                                
Broccoli                                       $0.49/lb                                         $1.66/lb
Red Pepper                                  $0.49/lb                                         $2.13/lb
Bananas                                        $0.32/lb                                         $0.60/lb
Mangoes                                      $0.16/lb                                         $1.00/lb
Strawberries                                $3.27/lb                                         $1.65/lb

Meats (31% cheaper)
Chicken filet                                  $2.28/lb                                         $2.99/lb
Ground beef                                  $1.95/lb                                         $3.32/lb
White-meat fish (bonito/tilapia)       $2.44/lb                                         $3.39/lb

Dairy/Eggs (10% cheaper)
Milk                                              $4.29/gal                                      $3.44/gal
Soy Milk                                       $3.66/gal                                       $6.95/gal
Yogurt                                           $5.41/gal                                       $7.91/gal
Cheese (e.g. Gouda/Swiss)            $4.40/lb                                         $5.56/lb
Unsalted butter                            $4.06/lb                                         $3.54/lb
Eggs                                             $1.90/dozen                                   $1.87/dozen

Note that for many tropical items, such as passion fruit (my girlfriends's favorite!), soursop, custard apple etc. don't even exist in the US or are incomparably expensive. New fruits I've never seen before somehow seem almost magical to me, in a way that other new foods don't. There are also infinite varieties of new potatoes, gourds and avocadoes, which can be fun as well.

Prices are also shaped by the Peruvian diet, so common foods in the US (like peanut butter) are much more expensive, and worst of all, real fresh milk is non-existent. Like in Europe, all the milk is ultra-pasteurized and sold unrefrigerated!

One adapts to the Peruvian diet over time, because it is both cheaper and easier, but I have definitely broken the bank a few times when craving strawberries, or French brie, or Nutella.

Which District to Choose in Lima and How Much You'll Pay in Rent

So I've convinced you to retire in Lima. But Lima is a massive city, with 9 million people, and 43 districts, so saying "live in Lima" doesn't say much. The cost of living varies wildly, and there are some districts that are much safer and better suited for expatriates. It is no secret that these are generally the southern part of the city, known as Modern Lima, developed around the former ritzy beach resort of Miraflores. However, obsessive that I am, I wanted to look at the hard statistics. 

I relied on two sources:
For safety statistics, I created an index based on the data in this study: 

For housing prices, I labor-intensively looked at all the listings for apartments of a medium size, and calculated price/sq mt on: 

My findings were not revolutionary, but they are still informative. The biggest conclusion was that the fanciest districts don't have a huge price premium over less prestigious safe districts, and are probably worth it for those who want to live in the center of things.

District-by-District Breakdown

The safe districts are:

Tier 1: San Isidro, San Borja, Miraflores
Tier 2: La Molina, Jesus Maria, Magdalena del Mar, Surco, Barranco near the ocean

I would generally stick to those until you know the city better.

Miraflores and Barranco have the most bars/nightlife. San Isidro is the business district. San Borja is very quiet and residential. Parts of Surco near Benavides are basically Miraflores-lite (and an easy combi ride to downtown), and the northern urbanization of Chacarilla and Monterrico are upper-class, but Surco is huge, and there are isolated and shady parts, too. La Molina is very nice with walled houses where the celebrities/super-rich live - it has the best price/quality ratio of housing, better weather (less fog in the winter), but it's also way out in the boonies with only one road in (with terrible traffic at commuter ours), so you'll be isolated. 

If you want to be in the middle culture and nightlife, there's no reason really not to live in Miraflores (or if you're a hipster, in Barranco), because the price difference isn't significant compared to other safe districts. I found that for a 70m place, average (asking) prices are about:

$756 in Miraflores, $728 in San Isidro, $644 in San Borja
$483 in La Molina, $609 in Jesus Maria, ? in Magdalena del Mar, $644 in Surco, $651 in Barranco

Besides living in exile in La Molina, it's only if you venture to the third tier of safety that you really get discounts: in places like Surquillo, Chorrillos, Pueblo Libre and San Miguel, it's more like $400.

Only Surquillo is really convenient for Miraflores downtown, although Chorrillos has also become a bedroom community for a younger middle class crowd. 

The high-speed bus goes easily between Barranco, Miraflores, and parts of San Isidro, Surco and Chorrillos, and combis are ubiquitous, so don't rule out "boring" residential districts if you see your dream house. La Molina, maybe you should, if you ever want to venture into other districts - some people don't care!

I used to live right in the Miraflores downtown on 28 de Julio with Larco (neighbors with the Fiesta Casino and within three blocks of the three poker rooms), and it was no more expensive (about $600 all-in) but it was too hectic for me. Miraflores has its residential areas too, though, if you're into parks and trees and things - I'd recommend San Antonio and (a bit farther) La Aurora. You can take a combi down Benavides to the Via Expres for 20c, or just walk 15-30 mins - free exercise!

Overall, expect to pay about $600/month all-in (utilities, taxes) for a nice 1-bedroom in Miraflores. My girlfriends's sister pays $300/month all in for an apartment overlooking Parque Kenedy (with two roommates).

How to Find Your Apartment
I would look on (slightly better deals) and

Just walking around and calling signs in windows is also good, and it's a great way to get to know the city.