The market in Andorra continues to be soft and is inter dependent on the state of the neighbouring countries. There is a small sign of movement in some sectors as bargains and fair value come in to play but there remains a vast reservoir of unsold properties, some going back to the pre 2008 start of the EU crisis.
It is clear from internet research that there is a vast asking price differential, and this is due to primarily Andorrans who don't have to sell but would do so at the asking price which in many cases remains at 2008 levels. When the need to sells come on to the market there is fair value to be had with settlement prices often 50% to the peak asking prices. This explains the differential in prices so a buyer needs to tread carefully.
For the future from mid 2014 I expect the market to continue as it is, the bottom may have been reached but there will require more impetus before prices start again to creep up. For the bargains around there are some interest, they do not have time to make it to websites etc, it is more word of mouth as they can get snapped up quickly.
The above is my opinon and experience in Andorra, I am not a registered agent just a realist!!
I have never claimed to be an estate agent, I do not sell property, nor indeed am I allowed to. However I can act for you in finding the right property am partnered with some reliable and trusted registered agents. If Anyone interested in viewing apartments or xalets I would suggest that you let me know in advance what exactly are your requirements and then I can have the agents prepare on your behalf a short list of properties to view without you wasting time viewing unsuitable properties.
Please note I DO NOT CHARGE YOU FOR THIS SERVICE, so in effect you have the advantage of my local knowledge and I can act on your behalf and in your interests.
Please contact me if I can assist or represent your interests in any purchase or rental, whether in support of your passive residency application, investment or that holiday home.
Subject to the usual credit checks you can borrow a maximum of 60% of the value of the property at a very competitive interest rate. Non-residents can also borrow up to a negotiable rate. The interest rate offered is 2% above Euribor, currently at 0.50%
The purchase of property is relatively easy normally with the payment of a deposit and after a few weeks of legal work a visit to a notary to obtain title to the property. There is a stamp duty tax payable to the comu (local parish) and which is fixed in all parishes at 1.5% of the purchase price. Also payable to the Government is the ITP at 2.5% (Impost de Transmissions Patrimonials). The buyer pays no commision to the agent for purchases, the commission paid by the seller is generally 5%.
Two years ago a capital gains tax was introduced to prevent speculation. There is a sliding percentage scale over a twelve year period which reduces from 15% to % 0 on the increase in sale value over purchase value. That is where my guidance on the matter ends as even lawyers here seem not to fully understand the complexity of the calculations. This law was poorly enacted, but be aware of its existence.
Prices for purchases continue in 2014 to start at around € 70,000 which will buy a basic studio apartment. Two bedroom apartments vary from € 150,000 to € 300,000 for a new quality finish, three beds are on the market up to a dream price of up to € 700,000, the average guide for a three bedroom apartment would be in the region of € 300,000. Detached xalets are appearing at the € 600,000 mark whereas a couple of years ago a Xalet under € 1 million would have been difficult to come by. Top of the range xalets may set one back up to € 4 million.
Please click on the logo of ROC PROPIETATS for the latest offers for purchases.
On thing to note in renting a property is the up front payment of four months rental, this can be unexpected if you are not preapred for it. You are required to pay at the time of signing two months refundable security deposit, one month's rent in advance and also one month's rent for the Agency commission ( plus local tax of 4.5%).
The rental market is fairly buoyant but prices have not risen and do not appear to be on an uptrend. Historically the rental yield has been and remains around the 2-2.5% yield, so property is not that attracive as a rental investment compared to hotspots such as London and major financial centres.
The luxury end of the market has been quite buoyant, there are some lets available, in general they are more quickly rented out due to their scarcity on the market and consequently the choices available may be limited.
As far as rentals are concerned the landlord will generally demand two months rent as a refundable deposit, plus one month rent in advance. Also at the time of signing the rental contract the agency fee will need to be paid which is also one month's rent. So at the time of signing a rental contract you will need to pay four months rent.
Rental contracts are by law for five years and are heavily weighted in favour of the tenant. To evict the tenant the landlord has to provide evidence of mal treatment of his property or non-payment of rent or a breach of the conditions of contract. He cannot decide in the five years that he wishes to sell the property and get you to leave. Also the annual rental increase can be no more than the annual inflation rate, so again the landlord can't unilaterally decide to raise the rent.
The law has recently changed on how much notice a tenant is required to give. As at February 2014 a tenant is required to give ONE month's notice for each year or a fraction of year remaining in the contract. This means that a person who rents an apartment whilst he is looking to buy may end up having to give or pay 5 months rent to get out of the contract. Now this can be negotiable and if you feel that you are looking at a shorter term rent it may be best to negotiate this at the start with the landlord. However the law is the law and if the landlord decides to pursue his penalty the Courts are likely to agree with him.
Rental prices start at about € 350 for a basic studio or one bedroom, rising to about € 400- € 500 for a newer and larger one bedroom, from € 500 up to € 800 for a good size two bedroom apartment and from € 650 to € 1300 for the range of three beds and duplexes. There are some xalets and terraced houses for rent and you would expect to pay from € 1,500 to € 4,000 per month for the top of the range house, but renting larger properties can be more difficult for choice.
Please click on the ROC PROPIETATS logo for the latest on rental availability.