President of Guild of realtors and certified real estate agents of the Principality of Andorra (Agents i Gestors Immobiliaris d’andorra, AGIA) Antonia Seve: “Construction of office buildings of class A – the most promising projects for investors today.
Our Guild was created in 2000 to protect the professional interests of realtors, to monitor the activities of real estate agencies and lobby for their interests. The College cares about the interests of its members and is responsible for processing proposals and innovations, the purpose of which is to improve the existing process of service delivery and the creation of new kinds of professional support. Similar institutions exist in every country of Europe – in France, in England, in Spain…
The real estate market is controlled by the Andorran Ministry of tourism and trade, represented by the Minister Francesc Camp. The Board consists of 230 real estate agencies (both Andorran and foreign), in fact, no more than 115 agencies really works in the market.
Dynamics of prices on the real estate market in Andorra last 10 years has been extremely positive. Since 2007 ( the economic crisis hit Andorra that year), until last year prices rose on average by 40%, but not everywhere. For example, in the centre of Andorra La Vella 1 m2 cost about 6000 Euro in 2007. Now the prices are down to 2000 Euro or even 1000 Euro per sq. m.
In general over the past year, prices on the real estate market in Andorra increased by 4.5%. The maximum market price of residential properties in Andorra – 6500 Euro per 1 m2, the minimum price is 1000 Euro per 1 m2.
The most “prestigious” areas of Andorra – Escaldes and the centre of Andorra La Vella. And, on the contrary, the lowest prices in areas close to the ski slopes: Canillo, Soldeu, etc. It was the opposite in 2007. When economic crisis took place, people who have had “weekend” flats and houses near the ski lifts, rushed to sell the property. As a result, prices in areas of ski resorts has fallen.
If you compare the price of the real estate market in neighbouring Spain and France, I would say that the prices in Andorra are lower than in Barcelona, Madrid or Paris, but much higher than in small towns in France and Spain. There is an indicator: if the real estate market of Barcelona is hit by a crisis, it comes to Andorra in about a year. And Vice versa – if the real estate prices in Barcelona are growing, next year we expect growth in property prices in Andorra.
Among major investment projects, I would name two main: la Batllia (the new building of the Tribunal of Andorra) and a new office building of the company Andorra Telecom. Both projects will be implemented in the coming years.
Many new companies are being registered now in Andorra. Usually business owners prefer to rent offices and not to buy it. At the same time, it is important to note that in Andorra today, there is a great shortage of offices of A class. But as far as I know, currently ther are no projects or plans now in Andorra to contrsuct office property. According to the Constitution of Andorra, the Andorran government can´t finance construction of commercial property. It can construct public buildings only. So this market niche – is private investors business.
The problem is that in Andorra there is no many plots of land suitable for development. In fact, only 5% of the total land belongs to private owners, the remaining 95% are under control of the government. In the centre of Escaldes, near the Caldea complex, there are quite a few large plots of land for construction. They all belong to one Andorran family but they are not in a rush to sell them.
Speaking about prospects of the property market in Andorra, I think that the rising of the prices will continue. According to our forecasts, in 2016 prices will rise by the same 4.5 percent, as in the past year. In particular, the price increase will affect apartments with 3-4 bedrooms in the centre of Andorra La Vella and Escaldes. There are little offers in the market now, and the demand for such apartments in these areas of Andorra is very huge.
Among the priorities I would call the continuation of the policy of attracting foreign investors. We are planning an extensive advertising campaign that will help attract the attention of international market participants. Construction of office buildings of class A and residential houses in Andorra La Velha and Escaldes with 3-4 bedrooms, as I mentioned earlier, are the most promising projects today.
In 2017 in Andorra will host the international Congress on real estate with the participation of all major players in this segment of the market. During the event we will present all of our projects to the participants.
The rules of the game in the real estate market in Andorra is quite simple: you only need to register a company in Andorra or to open a representative office. Legislation in this area is fairly stable: the last changes were made in 2004 and 2009. In the future no significant changes are scheduled.
To do business in real estate market in Andorra you must have a diploma. To get it, you must pass a state exam, which includes questions on relevant legislation of Andorra in the field of real estate market, the history of architecture of the Principality, as well as the development plan. It is not necessary to have a diploma of higher education. The exam must be passed in Catalan.