Like most people, you’re probably disappointed by the direction in which the Andorra property market is heading and want to sell property in Andorra ASAP. It’s understandable because Andorra may be one of the top ski destinations in the world and home to some of the richest people on the planet – but real estate prices here have been down for quite a few years now.
What do foreign investors see in Andorra? Andorra is a tax haven, just like its neighbour Monaco. A lot of wealthy individuals have second homes in Andorra, where they spend a part of the year. Andorra saw a major housing boom around a decade and a half ago, because of the huge demand from foreign buyers.
Andorra serves as an attractive destination for overseas property hunters because the Andorran administration does not impose any taxes whatsoever on income or on inheritance of property. There is no capital gains tax on properties that have been held for at least 12 years.
Andorra is also far less expensive than Monaco, which is why it still remains very popular with overseas investors. Many high net worth individuals such as professional athletes, Hollywood celebrities, fashion designers, etc. have second homes in Andorra.
The ski chalets in Andorra were for a long time, especially during the 1990s and 2000s, the hottest selling properties in Europe. That was until the 2008 global recession hit Andorra, taking away the demand and bringing down prices by a considerable extent. Even so, the luxury end of the Andorran property market is still as strong as ever, as the wealthiest people in the world are insulated against economic shocks or recessions.
For the rest, the property market in Andorra is quite depressed, which is not surprising because property prices were unrealistically high for a number of years in the principality. Prices have since corrected by a lot, but even so most people are unwilling to buy at present levels. This means property transactions in Andorra are lower than ever before.
Even in 2016, the property market in Andorra continues to struggle. The country has been affected by the crisis in the Eurozone because of which demand has been at a real low. Property prices – except for the luxury end of the market, as indicated earlier – have depleted.
Many local Andorran real estate developers have contributed to the depressed real estate market by refusing to sell newly built office or apartment complexes at lower prices, even though most of these new developments remain unoccupied. The asking prices demanded by Andorran developers are simply too high and unrealistic – it is as though they are still stuck in the early 2000s when such high prices could have been justified with good reason.
Gareth Jefferies of Alpine Property explains, "The number of ski property buyers has decreased, probably halved from the peak in 2006. People felt super confident then, they are much more conservative now, it's to do with job insecurities and worries over the euro. The prices have come down from the bubble of 2006 and there is a lot of stock."
But there are a plenty of great bargains available. A new penthouse apartment, which was selling for €2 million, was eventually sold for €1.4 million. It is still possible to sell apartments in Andorra provided they are priced realistically. At the lower end of the Andorra’s property market, a lot of chalet apartments are being sold for a real bargain. So if you’re looking to sell apartment in Andorra, it is important to set a realistic price for it and to work hard on the marketing and promotion of the property.