Andorra: growing investor interest in the residential sector
The residential sector in Andorra marked a turning point in 2024. The country succeeded in consolidating its position as an emerging destination within the European real estate landscape.
The latest “Spain and Andorra Market Report 2024–2025”, published by Engel & Völkers, highlights the increase in residential property prices due to rising demand and the arrival of new investors, drawn by the country’s multiple advantages:
- Stable economic and fiscal environment
- Constant appreciation of property values
- Legal security
- High rental yields in Andorra
- Tax benefits for residents and investors
Although Andorra was considered a tax haven until 2018, since being removed from the OECD blacklists, it has implemented key reforms that have allowed it to align with international standards of transparency and tax cooperation.
Currently, the country offers a personal income tax rate between 0% and 10%, a corporate tax rate of 10%, and other advantages such as tax exemptions on inheritances and donations. Additionally, it has the lowest VAT in Europe, which boosts its competitiveness against other markets.
Price increases by area
The general rise in property prices shows differences across regions. La Massana leads the way as the area with the highest increase, followed by Escaldes-Engordany, Encamp, and Canillo, all seeing significant rises.
Despite this growth, the number of real estate transactions dropped by 21.3% in the third quarter of the year compared to 2023. However, prices have increased by 12.5% overall, mainly driven by foreign investment. In response to this trend, the Government of Andorra introduced a progressive tax on property purchases by foreign investors in February 2024, aiming to prevent speculation and balance the market.
Most exclusive residential areas in Andorra
Escaldes-Engordany tops the price chart with €7,000/m², followed by Andorra la Vella (€6,875/m²) and La Massana (€5,726/m²), where average property values exceed one million euros — particularly in La Massana, where the average is €1,495,000. Encamp and Ordino maintain stable prices (€4,083/m² and €5,335/m²), while Canillo has seen a 9% increase, reaching €5,626/m².
Flats remain the preferred option for expats, singles, couples, and families, typically ranging between 85 m² and 161 m². However, in La Massana, there’s a growing preference for larger houses, averaging 450 m², located in areas such as Sispony, Anyós, or Escàs.
Rental market also on the rise
In the rental segment, Engel & Völkers reports strong interest in homes between 50 m² and 200 m². Prices per square meter vary by area, with Andorra la Vella being the most expensive at €30.19/m², followed by Escaldes-Engordany (€25.66/m²), Ordino (€22.58/m²), and Canillo (€18.93/m²). Andorra la Vella has seen the biggest annual price increase, at 58.43%.
In La Massana and Encamp, prices are similar (around €16.80/m²), but the properties are larger (approximately 168 m²). Sant Julià de Lòria offers the lowest rents at €8.43/m², though it has the largest homes, averaging 209 m².
Meanwhile, data from Pisos.ad for the fourth quarter of 2024 shows a 17% increase in the average rental price, rising from €2,419.92 to €2,832.73.
In conclusion, the Principality of Andorra is emerging as a dynamic and attractive market for both local and international investors, drawn by its favorable tax environment and excellent quality of life, surrounded by stunning natural landscapes and a wide range of outdoor activities.
