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Andorra Property Market Shifts to High-End Homes Amid Rising Costs: AGIA President

Andorra's real estate sector is pivoting toward luxury developments as developers chase profitability amid soaring construction expenses and demand from wealthy investors. AGIA president urges incentives for affordable housing and warns against rent controls that could deter landlords.

Key Points

  • Developers focus on profitable high-end properties targeting affluent foreign buyers due to higher land and material costs.
  • Population growth exceeds housing supply, pressuring prices; public incentives needed for affordable homes.
  • Proposed rent thaw law risks reducing rental supply as landlords may sell instead.
  • Government should prioritize social housing and partnerships, not direct building.

Jordi Ribó, president of the Col·legi d’Agents i Gestors Immobiliaris (AGIA), acknowledged that Andorra's property market increasingly targets higher-end homes, driven by developers' focus on profitability amid rising costs for land, materials and construction standards.

Speaking on Diari TV's *Parlem-ne* programme, Ribó noted that new developments cater to buyers with greater purchasing power, including growing numbers of affluent foreign investors and newcomers. He stressed that developers, not estate agents, make these choices based on market demand and risk assessment. While most buyers remain local residents, he argued that high-end properties sell reliably and dismissed speculation labels as normal market behaviour.

Ribó linked the trend partly to Andorra's appeal for wealthy newcomers but cautioned against blaming them alone for price rises. Population growth continues to outpace new housing supply, keeping pressure on prices. To boost affordable options, he called for public incentives like tax breaks or public-private partnerships, warning that without them, developers will prioritise higher returns. "If there's no fiscal advantage, you'll build what's most profitable," he said.

On rentals, Ribó expressed concern over the government's proposed rent thaw law, predicting it could shrink supply. Landlords, frustrated by years of frozen rents, might sell properties instead of renting, he said. Regulation has historically reduced availability rather than increasing it, he added, urging measures to build owner confidence and expand stock. The government should not build homes itself but focus on social housing for the neediest and temporary affordable schemes, he suggested.

Ribó also advocated broader reflection on Andorra's growth model and ties with neighbouring areas to address the housing crunch.

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