In the mid-2000s, Andorra’s property market boomed, with prices said to have increased by 50% in 5 years.
Then came the GFC, with average prices falling 25%.
In this article, we will introduce you to some key points before renting or buying property on the Andorran market, as well as where the market will be in 2018, including prices per square meter.
Please note that these are unofficial and objective market research results. Andorra Guides are not real estate agents and are not affiliated with the government.
Consider liquidity
If you’ve been looking to sell property in a major developed English-speaking country over the last few years, it’s not uncommon to list it on a Friday and sell by Monday.
With real estate in Andorra, things are a little different. Unless you’re willing to take a big hit, selling your property can take a long time, especially during a downturn.crashdecline.
So while average property prices in Andorra may have fallen by 25%, it is not difficult to imagine a scenario in which several sellers of expensive chalets, townhouses and apartments would take a significant haircut.
Tip: If you’re looking for a property for sale here, check it out on Google Street View before you make an offer. There is a good chance that it has been on the market for at least 1-2 years, and sometimes longer. Check out the example below (along with the For Sale sign), the image was taken in October 2014!
However, keep in mind that due to the ridiculously low interest rates in Europe, these sellers may not even care if the house doesn’t sell after several years on the market.
There are many other factors that can affect the liquidity of real estate in Andorra, which are covered in this property guide. However, a good example is sunshine: you may not value sunshine, which is a great opportunity to grab a cheap spot, but when it comes time to sell, don’t expect it to happen quickly!
Changing position of the country
Andorra has changed a lot over the past few years. Professional athletes, entrepreneurs and retirees from all over the world benefit from Andorra’s tax system, affordable cost of living and excellent quality of life.
Some Andorrans say that the country does not want these changes, but at the same time knows that it is necessary.
Obtaining a residence permit in Andorra is not always easy, but it is not particularly difficult either. There are 3 main options;
- you need to be a professional athlete or some kind of public figure,
- be prepared to invest 400,000 euros in the country (most often in real estate), or
- register and run a company that requires you to pay into social security and healthcare, and so on.
The takeaway from this is that people moving to Andorra either have a healthy income or asset base. This means they come to the country and spend money, support the economy and, yes, increase property prices .
Real estate is in demand
In 2016, there were not many rental options on the Andorran real estate market. Compared to today, the choice was huge. Rental prices rose by about 15% in 2017, and by at least another 15% in 2018.
In mid-2017, there were a lot of “old stocks” on the market. Many of these deals have since sold out. This is inevitably due to increased demand from both buyers and tenants.
As 2019 approaches, many new stocks are hitting the market, albeit at inflated prices. One might assume that these are owners who wanted to sell the property years ago but didn’t want to cut their hair. Once this round of old stock is sold out, the question becomes: what comes next?
Either new construction will increase again (there are still many vacant residential buildings that need to be completed/sold off), or prices will rise. Assuming the eurozone remains economically healthy and Andorra’s immigration policies allow more people to come to the country, it’s not hard to expect both. (But don’t buy based on that guess!)
Property prices in Andorra
The following is taken from our own market research. These are the numbers we use to decide whether a property is a bargain or overpriced, but please do your due diligence.
Below are the average advertised property prices (per square meter) at the time of writing:
- Chalet: 2,768.12 euros m²
- Duplexes and townhouses: 2,944.29 euros m²
- Apartments: €3268.41 m²
- Land: €726.48 m²
Chalets may seem like the best deal, but keep in mind that garages are often included in the square footage of detached homes and are much cheaper to build than kitchens or bathrooms!
What you don’t see here are wide ranges. There are some stunning properties available for 4,000m² or more, and you can be sure that if you’re buying something for 2,000m² or less, it will require some work.
Possibility of pricing
Generally, we consider the following Andorra property prices to be worth exploring as potential opportunities:
- Chalet: 2500 euros m² or less.
- Duplexes and townhouses: €2,750 per m² or less.
- Apartments: 2750 euros per m² or less.
- Land: €500 m² or less
This doesn’t mean that properties that fall within these prices are a bargain, there is still a lot to consider on a case-by-case basis.
Private and public markets
Beginners may not know that Andorra has a public and private real estate market.
Some sellers choose not to advertise their properties publicly, and in some cases the property is so in demand that it is not necessary.
For a long time, there was a lot of “silent money” in Andorra that was (historically) not reported to the Spanish and French governments. As Andorra becomes more open to the world, these property owners are quietly selling their properties and withdrawing assets in their own names.
Without public sale records, it’s impossible to tell what they’re selling for, but of course, few sellers are going to charge a price that’s significantly less than fair market value.
Review of the Andorran real estate market
Increased immigration and a healthy European economy are leading to increased demand both for rental properties and from buyers wanting to live in Andorra. Coupled with the current supply shortage, the Andorran property market only seems to be trending upward.