Andorra lies in the eastern Pyrenees between Spain and France. The principality has a population of 75,000 and is a popular holiday destination, attracting more than 8 million visitors annually. The country has opened up to foreign investors in recent years: the “Foreign Investment Law”, which came into effect in 2012, allows foreign companies to own 100 percent of their companies in Andorra as well. The real estate market is also benefiting from these developments. “In 2018, the number of transactions increased by 5 percent over the previous year to more than 2,000. Exclusive residential property is in particularly high demand among international buyers. This is also reflected in the consistent rise in prices,” said Thomas Kampfraat, Managing Director of Engel & Völkers Andorra.
The most expensive residential area in Andorra is in the parish of Escaldes-Engordany, the financial and business centre of the principality. In 2018, properties here reached an average price of around 5,700 euros per square metre. Properties in the capital Andorra la Vella are also in high demand. Last year, the average price was 5,550 euros per square metre. 70 percent of buyers in Andorra come from abroad. The largest group of prospective investors comes from Spain, followed by the British. Primarily, Spanish buyers are looking for a second home close to ski slopes. Britons are interested in substantial houses and villas in prime locations.
Residential properties in Andorra remain an attractive and stable investment. With its unique location in the heart of the Pyrenees and its claim to the highest capital in Europe, Andorra offers a wide array of recreational pursuits both in summer and winter. Demand for residential property in the principality is high as a result. Engel & Völkers also anticipates that the real estate market will continue on this positive course in 2019. Many new construction projects are currently underway in Andorra, yet demand exceeds supply by far. “New developments are particularly popular with locals, while foreign buyers tend to prefer existing properties. We expect yet another growth in prices this year, especially in central locations in the capital and areas close to the ski slopes,” said Thomas Kampfraat.
More information about Andorra’s residential property market can be found in the “Market Report for Spain and Andorra 2018/2019”, published by Engel & Völkers.