As a tax haven it has always attracted investment from wealthy people seeking residency and as Monaco has become overcrowded the luxury property market in Andorra has grown.
Even in times of recession Andorra is popular as the wealthy want to preserve their wealth, and having Andorra residency means their capital is free of many of the taxes they would have to pay in their homeland.
But the local market and investors seeking holiday home are helping to keep the market buoyant. 'Andorra apartments are often bought by skiers for a holiday home, and rented out for income while not skiing themselves. Andorra also has some 80,000 people living in the country full time, with many people upgrading or downsizing,' said a spokesman for Tribune Properties who specialise in Andorra real estate.
Andorra saw a near 5% increase in property values in 2007 and the company says that prices so far this year indicate this will continue.
'Over the last twelve months the average purchase price of property has risen. Two years ago the majority of our sales were for apartments around the €300,000 Euro level. Now we're selling as many properties in the half a million to million Euro bracket', the spokesman added.
Some of the increase in value of the typical Andorra property now being sold is due to the better known European tax haven of Monaco suffering a shortage of property. It is now rare to find even a studio apartment in Monaco under a million Euros so buyers are looking elsewhere.
A new airport due to open in 2010 will help boost property prices further in Andorra. Currently tourists have to fly to Barcelona in Spain or Toulouse in France and face up to a three hour drive to reach Andorra.
'At the moment Monaco has the advantage of being ten minutes away from an international airport by helicopter, while Andorra is over two hours. With that advantage gone we anticipate more people considering a tax haven will consider Andorra, with a resulting appreciation in property prices,' said another agent.
In recent years the number of tourists in the ski season has reached ten million. But tourists are attracted all year round for walking, treking, riding, biking and shopping in duty free shops. Prices start around €157,000 for a furnished one bedroom apartment in Els Cortals ten minutes from the ski slopes.
