Buying Property in Morocco - A guide to real estate Investment in Morocco
Moroccan Residential Property Market
A leading Emirati real estate development company has added it’s presence to those benefiting from the increasing real estate opportunities in the kingdom. Sorouh real estate announced recently that it had made a “major” investment in a $450m project.
According to Moroccan government statistics, approximately 55% of Morocco’s population, 3 million households,, live in urban areas, and the number is growing year on year. This concentration is resulting in a housing shortage that is proving lucrative for investors .
Housing demand is not just limited to the low-income sector. Increasing tourist traffic and second-home buyers are stretching the existing supply of tourist residencies and villas. Morocco’s tourist program, Vision 2010 includes plans for six new tourist resorts over the next to satisfy the growing demand by foreign second home buyers.
According to recent research, real estate purchases accounted for more than 15% of foreign investment in Morocco in 2006. Half of property sales in Marrakech were to foreigners. French investors are leading the way currently investing in nearly ten times as many properties as British investors.
The majority of investors said they felt Morocco’s real estate market was particularly promising as a buy-to let investment. The governmental tourist program is seeing tangible results and the demand for holiday accommodation has risen considerably. Prices are low at the moment but expected to rise sharply in the future. It is clear why most investor’s choose to let their property. The rental returns forecast for new developments are promising to say the least. Income from a 100,000 Euro, two bedroom apartments expected to bring a monthly income of 2,000 Euros a month in the peak season of July and August. More than enough to meet the annual mortgage payments. Currently, rental occupancy during the high season is around 85% and expected to rise.
Residential Housing
The housing market in Morocco is still in its early years of development, which in part explains a lot of the comparisons with the Spanish market of about 20 years ago.
Morocco is clearly a country in development. Although its economy has been growing by an average of 4% per annum since the early eighties, it was until recently a very difficult country to invest or do business in. In a drive to open up its free market economy to foreign investment, the government has been reducing red tape and streamlining the bureaucracy and regulations that for so long formed a barrier to development.
Although some restrictions, such as currency control, still exist, the climate is an increasingly open and fluent one, in which foreign nationals are encouraged to open accounts, invest and own property in an environment which the authorities are working hard to make increasingly secure and attractive. Although this North African state is a Muslim monarchy, Morocco is blessed with political stability and a moderate, tolerant attitude towards religion.
Investment climate
These conditions, together with Morocco’s natural and cultural attractions, are making Morocco one of the dynamic investment markets in the international real estate sector. The difference between current price levels and their growth potential offers both value for money and attractive investment potential, supported by the government’s drive to quadruple tourism visits by the year 2010.
Constant infrastructural improvements in the form of new roads, ports, technological facilities, airports and modern resorts are already reflected in the rapid growth of visiting tourists and foreign property buyers—a situation that is further accelerated by the Open Skies Agreement, which will link Morocco to Europe’s network of budget airlines and routes. Five areas on the Mediterranean and Atlantic coastlines have been earmarked for the development of major resort areas. They have already seen a high increase in tourist visits, with the French ranking top, followed by Spanish, British and Germans.
Like many of the new emerging former Eastern Bloc countries that are becoming the focus of British residential investors, growth is being estimated at anywhere from 10% to even 40% per annum in some cases. However, given the current slowdown in the UK housing market and the current slowdown in growth across the more established markets such as Hong Kong, Australia and the USA, even a more conservative estimate of 10% still looks attractive, especially when it is so affordable compared to some of the alternatives.
