Andorra, A Tax Haven
Article: Although not a buyer’s market right now, strong economy and demand may change things quite soon.
Andorra is attractive for property investors because it’s not only a tax haven, but property prices have grown year on year and can be expected to continue doing so.
Andorra real estate investment market analysis
Located in the eastern Pyrenees on the border between France and Spain, the Principality of Andorra is a tiny country of mountainous landscapes and rivers, which happens to offer the best skiing in that area.
- Capital appreciation is set to continue because property prices are relatively low
- There is not much land available to build on, so demand continues to be strong
Real estate in Andorra
A holiday home in Andorra will give you access to world-class hiking and skiing. Plus, most of the real estate for sale in the country is new, whether you are talking about houses or apartments.
Locations and styles
Andorra La Vella is the capital and the main shopping centre while Canillo, Ordino and La Massana are the other major towns
- Canillo is situated between the mountains and offers new apartments in proximity to the ski resorts.
- Massana and Ordino are located on more open ground and, in addition to apartments and townhouses, you will see villas and chalets for sale.
- Because most of the land available for development was on the hillside, many new homes have spectacular views of the snowcapped mountains.
- Detached houses, usually called chalets, are typically found in smaller neighborhoods such as La Massana, 6 km from the capital and a popular center for hiking and mountain biking in summer.
- Under local law, all new buildings have to be clad in the local slate, which provides for a homogeneous look.
Economy and infrastructure
Although the country is prosperous with very few unemployed, just some years ago, the Andorra was just another ‘backwater’. But infrastructure, such as highways, has been significantly upgraded.
- The look of Andorra and its capital was completely changed by a construction boom that began in the 1990s and collapsed at the height of the global financial crisis.
- House prices have since dropped by about a quarter — but the decline has not been as pronounced as Spain.
Affluent Spaniards from Barcelona bought until the recession and now the buying interest seems to come from the UK.
- Non-Andorrans are allowed to buy 1 single property in the country, but this does not guarantee residency nor is residency required.
Supply and demand
There is adequate supply at all price points but this is not a buyer’s market and locals will not reduce asking prices.
- In the wake of the collapse of the boom, there are a number of apartments available for sale in the range of EUR €200,000 to EUR €300,000 as well as a small number of unfinished projects.
- Demand is starting to show that prices would rise in the medium term.
- EUR €100,000 will buy you a studio apartment in a ski resort while a 4-bedroom detached house will set you back by EUR €1 million
The bottom line
Some of the pros about buying in Andorra include safety and security, world-class skiing as well as a favorable tax environment.
- It’s currently not a buyer’s market; with demand set to get the prices rising, however, it’s possible to invest now for a profit in the medium term.
- Holiday homes are probably the strongest bet for real-estate investment in Andorra.