Traditionally investment in the  Andorran real estate market has been a safe haven for the discerning investor with property values showing a steady appreciation in the quieter economic times and meteoric rises in the boom years of the early 2000s. The current world economic recession which has impacted heavily on international property markets has not left Andorra unscathed but the drastic negative equity values seen in other European countries happily is not the case in this tiny European Principality where values in some areas have seen a minor drop but for the most part just levelled off. To understand why we need to look at various aspects which make Andorra  unique and  are contributing factors to capital appreciation in real estate investment.

Geographically Andorra lies on the same latitude as Rome but is situated above 900m with its highest peak Coma Pedrosa at 2941 m, nestled in the heart of the Pyrenees between France and Spain.  Of the total surface area of Andorra, 480 square kilometres, only 8% is privately owned and able to be developed for property, subject to strictly controlled planning regulations.  The decreasing availability of land and sites for development are major factors in ensuring capital growth for the investor.

Economically Andorra is tax friendly country with no income tax and no inheritance tax for Andorran residents and nationals alike.  For those who wish to go offshore to Andorra legally these are great advantages and together with beautiful scenery, a great climate with over 280 sunshine days a year, unrivalled personal security and first class medical service Andorra has lot to offer the high net worth individual prospecting a new domicile.

Whilst property prices are definitely higher than neighbouring France and Spain they are considerably less expensive than other European tax friendly countries such as Monaco or Switzerland.  The Estudi del Mercat Immobiliari Andorrà published by AGIA, the Andorran Profession College of Real Estate Agents and Managers, giving shows that in 2008 the average price per m2 for apartment in the capital Andorra la Vella and adjacent Escaldes-Engordany reached €6.098 and €5,222 respectively representing a rise on the previous year of 35% and 1%. In the higher parishes of La Massana and Ordino the average price per m2 for apartments was €4.310 and €4.217 up 2% and down1% respectively whilst the price per m2 for apartments in the parishes of  Encamp and Canillo varied from  €4.569 to to €4.461  down 7% and up 2% respectively.  The average price for St. Jùlia de Lòria rose by 9% on 2007 with an average price per m2 of  €4.476 per m2.  The average price in 2008 per m2 of constructed area for houses spanned a price range of €3,050 in Ordino, €3,303 in Canillo, €3.839 in Escaldes-Engordany, €3.907 in St. Jùlia de Lòria, €4.176 in La Massana  to €4,355 in Andorra la Vella to € 4,624 in Encamp.  This does not take into account the value of the ground plot.  The town house average price per m2 ranged from €3.575 in Encamp, €3.846 in St. Jùlia, €3.905 in Escaldes-Engordany, €4.050 in Andorra la Vella, €44.369 in La Massana to €4.403 in Ordino.