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Andorra Set For Another Year Of Rising Property Values

by Phillip Morton, Investors Offshore.com

02 May 2007


Andorra saw one of the sharpest property price rises in Europe in 2005, with a 19% increase. This has been sustained with another high leap in prices in 2006, this time of 16%, and according to property specialists Tribune Properties, 2007 could see another double digit property price rise for the jurisdiction.

"There are three streams of buyers for Andorra, say Tribune. "An active local market, second home buyers looking for ski apartments, and international buyers who want to gain residency in a tax haven. The international buyers add pressure on prices and often buy three or four bedroom apartments and chalets, making sure that the top end of the market is as active as the low and mid range properties."

However, Tribune added: "With a lack of snow for the first eight weeks of the Andorra ski holiday season, the second home buyers could be thinner on the ground than usual. The number of tourists is down by some fifteen per cent, and that could impact the property market as some visitors like it so much they buy a property in popular resorts such as Arinsal and Soldeu. So we feel a ten per cent rise in Andorra property values could be realistic for 2007."

Nonetheless, Tribune says that Andorra has been benefitting recently from the high cost of real estate in Monaco.

Monaco recently became the most expensive country for property in Europe, and while a 32 sq m studio in Monaco will cost close to a million euros including the closing costs, Andorra offers over 100 sq m three bedroom two bathroom apartments at less than half the price - with the same tax advantages as better known Monaco.

According to Tribune, the different type of buyers tend to head for different areas of Andorra, with the ski apartment buyers tending to purchase in the key ski resorts of Soldeu and Arinsal.

Those looking for residency go more for the year-round villages and towns which have a resident community.

Outside of the capital (la Vella) these tend to be La Massana and the upcoming village of Anyos, Ordino and Arinsal, although Arinsal's nightlife during the ski season early December to late April tends to steer many newcomers to La Massana and Ordino.

In addition to attracting international buyers in increasing numbers for residency, Tribune notes that the Andorra authorities have invested heavily in their ski infrastructure, boosting the country's tourism potential and subsequently Andorra's real estate market.

For this year's ski season, Andorra has opened a new family friendly ski park in Arinsal, moving away further still from the old image of a cheap and cheerful ski holiday for 18-30 year olds, to one that caters well for all.

One of the few drawbacks when taking residency in Andorra compared to Monaco has been access to a major international airport. While Monaco enjoys close proximity to Nice Airport, with a ten minute helicopter ride available, Andorra's nearest airports have been Barcelona and Toulouse, three hours away, with no direct flights to Andorra.

Recent road improvements between Barcelona and Andorra have cut this by thirty minutes, and there is a possibility of a scheduled helicopter service, Andorra weather permitting, or more likely ten minutes from the Spanish Andorra border, allowing quicker access to international flights for business people considering Andorra residency.

Other improvements within Andorra include new tunnels, allowing quicker access to the ski fields, and making driving around Andorra easier.

With more demand from international buyers who want to take advantage of Andorra residency, the Andorra government announced in February that it was increasing the number of residency applications from the previous 200 year a year to 500.

"Andorra is becoming more popular among the international buyers", commented local travel guide YourAndorra, "And with Monaco real estate prices sky high it comes as no surprise that the government has moved favourably by allowing more residents. But it's not just the tax free living they come for - it's the Andorra weather as well for many who see the ideal opportunity to live in a tax free environment and enjoying winter sports too."

A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp

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