Construction in Andorra is experiencing a complex and paradoxical situation. Despite being one of the country’s main economic drivers, the sector faces unprecedented tension that threatens to hinder its growth. If you are considering living in Andorra, it is crucial to understand the current dynamics of the real estate market, marked by high housing demand that clashes with serious difficulties in developing new projects. This situation not only affects prices but also the availability of homes for new residents.
The Principality is experiencing a moment of great appeal, with more and more people interested in obtaining residency and enjoying its high quality of life and tax benefits. However, this popularity has highlighted two structural problems that are stifling the construction sector: the lack of skilled labor and the scarcity of developable land. Below, we delve into the causes of this crisis and how it may impact your relocation plans.
The Paradox of the Andorran Real Estate Market
Andorra finds itself at a crossroads. On one hand, housing demand continues to grow, driven by population increase and interest from foreign investors. On the other hand, supply is unable to keep pace. Far from being a lack of work, construction companies are overwhelmed by the impossibility of executing the projects that the market demands. This gap between supply and demand is at the epicenter of the tension experienced in the sector.
According to the latest Business Climate Survey from the Andorra Chamber of Commerce, Industry, and Services (CCIS), business confidence has begun to wane. Although the sector was a pillar of growth in 2025, indicators show signs of deceleration. Optimism is diluted in the face of obstacles that seem to be consolidating, creating a scenario of uncertainty for developers and investors.
The Two Major Obstacles to Construction in Andorra
To understand the current situation, it is crucial to analyze the two factors that are limiting the sector’s ability to respond to the country’s needs. These are not cyclical problems, but structural challenges that require long-term solutions.
Shortage of Skilled Labor: A Growing Problem
The main bottleneck is the lack of personnel. The CCIS survey is clear: 56% of construction companies admit to having serious difficulties finding workers. This figure places the sector at the forefront of all economic activities in terms of labor shortages. Andorran construction companies cannot find bricklayers, operators, technicians, or specialists, which abruptly halts their productive capacity.
The causes of this shortage are diverse and complex:
- Aging Workforce: Many skilled professionals are retiring, and there is no clear generational replacement.
- Lack of Local Training: The specialized training available in the country is limited, making it difficult for young people to enter the sector.
- Difficulties Attracting Foreign Talent: Administrative restrictions, coupled with the high cost of living in Andorra, complicate the hiring of workers from other countries.
Without the necessary human resources, it is impossible to maintain the pace of activity demanded by the market, extending delivery times and increasing project costs.
Lack of Developable Land and Regulatory Uncertainty
The second major obstacle is the limited land available for construction. Beyond Andorra’s mountainous geography itself, the problem has been exacerbated by regulatory factors. Temporary suspensions of urban development licenses, applied by the comunes while they revise their Parish Urban Planning and Development Plans (POUP), have created an administrative halt.
This situation creates profound legal uncertainty that paralyzes investment decisions. Developers are reluctant to take risks in an environment where the regulatory framework is ambiguous, changing, or directly suspended. No one knows for sure when the suspensions will be lifted or what the new conditions for building will be. The message received by the sector is clear: it’s a time to wait, not to plan. As a result, the pipeline of new projects stagnates, even though the need for housing is more pressing than ever.
Economic and Social Impact of the Construction Crisis
The consequences of this perfect storm are not limited to the construction sector. The slowdown in activity has a domino effect that impacts the entire economy and, very directly, Andorran society and those who aspire to be a part of it.
Economic indicators already reflect this loss of pace. The sector’s Gross Value Added (GVA) is growing less strongly than in previous years, job creation is stagnant, and overall revenue is moderating. This deceleration of one of the country’s main economic engines is a cause for concern.
Consequences for Future Residents
If you are planning your relocation to Andorra, this situation directly affects you. The scarcity of housing supply, both for purchase and rent, drives prices upward. Finding a home that fits your needs and budget becomes more complicated. The lack of new projects means fewer options available in the market, intensifying competition among home seekers.
This problem is one of the main citizen concerns in the country. Andorra wants and needs more housing to accommodate new residents and satisfy internal demand, but the mechanisms to generate it are blocked. It is a paradox that the Government and the comunes must resolve to ensure sustainable growth.
Are There Short-Term Solutions? Sector Outlook
Despite the complicated outlook, not everything is negative. The residential sector continues to generate expectations, partly thanks to initiatives such as the Government’s new guarantee program to facilitate the purchase of first homes. This stimulus could boost a part of the market, but its success will depend on urban planning permits being unblocked and a solution being found for the lack of labor.
Companies in the sector are clear: if urgent measures are not taken, the risk of stagnation is very high. It is necessary to streamline the review of the POUPs, offer a clear and stable regulatory framework, and develop active policies to attract and train the professionals that construction needs. Without these actions, even the strongest demand will not be enough to reactivate the launch of new projects.
How This Situation Affects You if You Plan to Move to Andorra
Understanding the construction crisis in Andorra is key to planning your relocation realistically. The housing search may require more time and a larger budget than you initially anticipated. Therefore, expert advice is more important than ever.
At Andorraway, we thoroughly understand the particularities of the Andorran real estate market and the challenges faced by new residents. Our team can help you navigate this complex scenario, optimizing your search and managing all the necessary procedures for your residency in the Principality.
Don’t let market uncertainty hinder your plans. If you want to start your life project in Andorra with the utmost guarantees, contact us. We will offer you comprehensive support to make your relocation a success.