The property market in Morocco is benefiting from the fact the Moroccan economy is “one of the most dynamic economies in the North African region”.
According to a recent report from Deutsche Bank’s research department, Morocco’s economy, which boasts promising potentials, is way ahead the economies of the North African region (Egypt, Libya, Tunisia and Algeria) thanks to the partnership between the kingdom and the EU. The report highlighted Morocco’s account macroeconomic stability, financial sector’s soundness, natural resources, political stability and investing environment.
The report, entitled “North Africa: the Mediterranean neighbors on the path of development “was published online by the German TV channel Deutsche Welle, puts Egypt and Tunisia second, and Algeria and Libya fourth and fifth respectively.
Moroccan Professional Banking Group chairman Othman Bejelloun said that Morocco’s economy will flourish in the next five years. He said due to Morocco’s global trade, improved competitiveness among SMEs and greater human capital resources, Morocco’s economy will have emerged by 2015 as a regional platform for production and export to Europe, Asia, the Americas and sub-Saharan Africa.
The North African country is “basically credit-crunch free”, making it an appealing location for savvy UK-based property investors in the current climate. Steve Wright, a property specialist based in the West Midlands, described Morocco as a nation with “a strong investment climate, attractive financing, a competitive workforce and logistics”.
Individuals with property in Morocco may be pleased to hear that Moroccan resorts top the list of best-value destinations in 35 countries across the globe.
International estate agency group Savills has published a list of best-value destinations and the data is derived from the company’s sales figures so are tilted towards the top-end of the market but however offers some interesting comparable data on popular holiday home markets. Emerging destinations top the list like Cairo in Egypt and Marrakech in Morocco are the most affordable of the 35 with average sale prices of €1460 sq/m and €1425 sq/m respectively.
Travel expert Sarah Baxter, deputy editor at Wanderlust magazine said that holidaymakers will be able to immerse themselves in the culture-rich country after just a three-hour flight.
Ms Baxter explained that Morocco offers the most exotic experience for the shortest flight. In just three hours you can be nose-deep in culture shock. She added that Travellers are getting more adventurous, looking for more experiential travel, rather than just beach flops.
According to countrylife.co.uk reports, Morocco is “more adventurous location” which could reward investors willing to stay off the beaten track. The country also enjoys a warm climate for most of the year and is benefiting from major government investment in infrastructure projects. Besides, there are three separate but equally attractive property markets in Morocco – the Mediterranean area, Atlantic coast and Marrakech.
In related news, the Independent reported that ‘mid-haul’ destinations such as Morocco are set to become popular with holidaymakers abandoning the Euro zone this year.
Morocco has made impressive headway as it had reinstated affordable housing incentives in its 2010 budget after a building slowdown caused by the global recession and the removal of a tax break for low-income housing developers in 2008. Morocco’s total affordable housing shortage is estimated at 1.2m homes, which is expected to increase by 125,000 annually. Construction on social housing units stalled after the government revoked tax breaks for private developers that were included in the 2008 Finance Act.
Toufik Jhira Housing and Town Plan Minister warned that social housing, which accounts for 70% of the national market, is in a state of crisis. He said that action must be taken before 2010 to save the sector from impending disaster.
According to the British think-thank Oxford Business Group, the Moroccan government has offered affordable housing incentives in its budget. The 2010 Finance Bill will give social housing developers exemptions from a capital gains tax and a cement tax. Social housing is defined by the government as homes sold for less than Dh 200,000 (€18,000) .
The report also point out that “university dormitory developers will also be granted tax incentives.”
Youssef Ben Mansour, chairman of the National Federation of Housing Developers said in a press statement that the incentives given to developers will allow a return of investment to the construction industry, with all that it entails in terms of opening up new construction sites, job creation and sales of building materials. Low-income homebuyers will also benefit from a value-added tax rebate of Dh 40,000 (€3585), up from Dh 30,000 (€2689), and an exemption from registration fees.
Tourism Minister Yassir Zenagui said that Morocco’s tourism receipts increased by 12 per cent in the first quarter of this year. The minister told the Dubai-based TV channel Al Arabiya that the rise in tourism receipts was the because of the quality of Moroccan hotels services and products.
In order to seize the opportunity to lure tourists from south European nations, Morocco has recently invested heavily in its tourism industry, A large amount of new resorts are expected to bring an increase of 10% in tourist arrivals this year.
Industry and government officials said that Investors from the Arabian Gulf, Europe and North America have recently invested huge amount into North African countries, particularly Moroccan hotels, resorts and holiday apartments which has helped the north African country more than double tourism earnings in the past decade. Foreign investors are responsible for the creation of a number of resorts, which have in turn created over 250,000 hotel beds for potential tourists to Morocco. The number of arrivals kept growing last year despite the global economic downturn, with an increase of 6 percent, but income fell as tourists spent less.
The aim is to promote Morocco as a great alternative for sun seekers. However, the industry and government officials are confidant that Morocco will see a turnaround in fortunes and that the new investments will reap their rewards. In good news for rental property investors, tourism ministry stressed on the huge level of importance of marketing activities and shifting the image of Morocco away from being a poor African country.
French State Secretary for European Affairs Pierre Lellouche said that Morocco is a hub of stability and development in a problem-laden region. The Moroccan housing sector is benefiting from the fact it managed to escape the worst of the global economic crisis as high demand from investors and second home buyers boosts its profile.
Lellouche told radio channel “chaine inter” on the occasion of the upcoming Throne Day that the Moroccan government’s mobilization and modernity is appreciated by the French government and Morocco succeeded in combining its religious tradition, historical culture and the requisites for modernity and development. He said that the French-Moroccan friendship ties grow stronger which is expected to boost more number of investors from France.
On advanced status in The EU, He said that this privileged partnership helps Morocco promote its legal and industrial standards without any compulsion from Europe.
Individuals looking to buy properties in the country will be pleased by WTO deputy director-general Alejandro Jara comments that Morocco has been able to resist the world economic slump, thanks to its macro-economic policy. In an interview with the Moroccan daily ‘Aujourdhui le Maroc’, he said that Morocco has “a very open economy” and “a clear trade policy”.
In related news, IMF Managing Director Dominique Strauss-Kahn had also hailed Morocco’s diversified economy and said that the country could have a stronger growth rate.
The High Commission for Planning (HCP) has stated that the Moroccan economy’s GDP grew 3.5% in the first quarter of the year 2010, against 2.2% a year earlier. This development is a result of an increase of 5.4% in non-agricultural GDP.
HCP has said that the agricultural value added declined by 8.6% in volume. All the non-agricultural activities recorded an improvement compared to the first quarter of 2009. Morocco’s industrial production index increased 0.6% during the first quarter of 2010 compared to the same period last year.
Meanwhile, The African Development Bank (AfDB) has approved a loan of 100 million Euros to finance the fourth phase of Morocco’s Public Administration Reform Support Programme (PARSP IV). The statement from the bank said that the programme’s objective is to promote strong economic growth and sustainable development, thereby strengthening the economy’s competitiveness while ensuring medium-term macro-economic viability. These are expected to boost the property market in the country.
Investors are able to take advantage of competitive deals for properties something which is further enhanced by the cheap labor and materials in Morocco making renovating an attractive choice for many. Individuals looking to buy properties in the country will be pleased by news that visitor numbers rose by six per cent during 2009 and government officials are already predicting further rises of around ten per cent this year, Reuters reported.
Marriot Hotel Group has displayed its faith in Morocco region by announcing that it is planning to build another 40 hotels in the Middle East/Africa region in the next five years.
Those who have invested in rental properties in Morocco could see a rise in the number of tourists visiting the destination this year. There is a massive potential for, not only tourism growth but travel growth, in terms of business travel and short intercontinental and even national breaks. The plans by the Marriot Hotel Group are a testament to the development and rising wealth within the region.
The established markets were nearly all in a deep recession; meanwhile the Moroccan economy was still growing strongly (5% GDP growth in 2009) on the back of a bumper crop season and construction. Because of this, development continued; with the internal housing market remaining strong even the luxury developments aimed at foreigners continued to spring up. Booming economy means increasing demand for housing; an increasingly healthy construction industry, property market and all round growth.
In more good news for investors, Buy Association said that capital gains of up to 35 per cent are possible in Morocco. The portal noted that the government of the country has been taking action to help boost the economy and property sector, including providing financial incentives for Moroccan expats, funding the construction and renovation of roads, airports and also engaged in slum clearance projects.
The Food Agriculture Organization (FAO) will provide technical support to Morocco’s forest preservation programme and it also agreed to cooperate in agriculture and fisheries.
For this purpose, the two parties had also signed an agreement worth USD 994,000 Morocco’s forest preservation programme which covers a period of four years (2010-2014). They also signed two agreements worth USD 669,000 for promoting agriculture and boosting the Kingdom’s inshore fishing fleet. Both agreements aim at ensuring good governance and management in terms of information flow and forest protection.
Morocco’s Ambassador to the United Nations in Geneva, Omar Hilale said that promoting business climate and Foreign Direct Investments are among Morocco’s top priorities. Hilale said that Morocco is committed to strengthening its economy’s competitiveness, recalling that the country has liberalized several key economic sectors.
Meanwhile, the tenth real estate and housing exhibition “Logimmo” was organized on June 3-6 at the Casablanca International Fair.
The organizers said that fair is an opportunity to inform visitors about the novelties in the Moroccan real estate sector and exchange information. Nearly 50 exhibitors participated in the event, coming from the different regions of the country. The exhibitors included organizations offering housing and real estate loans and the main property developers, as well as insurance companies.
The revenue generated by Morocco’s tourist industry is increasing and the country could see a rise in the number of tourists visiting the destination this year, it has been suggested.
According to Travelzest’s Best of Morocco, the country is the ideal spot for individuals who are looking to go on a budget break, with places like Marrakech in particular offering good value for money.
Figures from the holiday company TUI, an Adventure Travel Online Magazine show that Morocco could receive a tourism boost from adventure travelers this summer. They said that adventure travel is a huge market for UK companies, providing over 400,000 passengers per year. Adventure Travel is advising that those looking to mix their adventure holiday with culture head to Morocco this summer.
Alun Davies, editor at Adventure Travel Online Magazine said that Morocco might be good because people are going to be guaranteed the weather, it’s only two and a half hours flight away and there are some fantastic adventure type holidays within a totally different culture. Those who have invested in Buy-To-Let property in Morocco could see “expansion in the adventure travel sector.”
In related news, ABTA – The Travel Association recently predicted that Morocco will be a strong destination for travelers in 2010, as investment in infrastructure and transport will attract holidaymakers looking for high standards at lower costs.
Many investors in Moroccan property market are choosing to look away from established holiday resorts and are starting to look away from the highly developed tourist spots and consider purchasing in nearby villages.
The vast majority of tourists and residents come to Morocco to relax on the beaches and in the coastal resorts. The fabulous climate all through the year and its picture perfect beaches has been highlighted as the main reasons for its popularity among holidaymakers, allowing them to spend the winter months relaxing on a beach. The increase in tourism drives the real estate market in Morocco and has led to increased property values in established coastal resorts.
Purchasing property in villages nearby resorts offer several benefits to foreign investors, such as cheaper property prices and easy access to the main resorts. There are still lots of unspoilt villages dotted along the coast within a short car journey of the larger towns. Properties in those villages could be up to 50% less expensive than similar buildings in the tourist areas.
UK-based newspaper the Independent said that in recent years, authorities in Morocco have reacted accordingly by introducing development programmes that has seen the development of many new properties in popular areas. Morocco’s growing popularity has therefore seen these houses become subject to strong demand, thereby pushing up prices in tourist hotspots.
Marrakesh was said to have seen the bulk of the new developments, along with many coastal towns and cities.