According to Morocco’s central bank, the annual growth of property prices in the country nearly doubled during the third quarter of this year. Bank Al-Maghrib said in a note that the price index rose 2.4 per cent over the period compared to 1.4 per cent in the second quarter. Morocco’s economy grew by 4.2 percent in the second quarter of 2011, a slower rate of expansion than the 5 percent seen in the first quarter.

As the government raised public sector wages and boosted food and energy subsidies, the country’s budget deficit rose 17 percent to 22.7 billion dirhams ($2.78 billion) in the eight months to end-August. However, the High Planning Commission (HCP) said in a report that Morocco’s economic growth likely slowed to an annual rate of 4.1 percent in the third quarter, below the country’s full-year target and this slight slowdown has stemmed mainly from declines in the growth rates of non-agricultural sectors.

The finance ministry forecasts a 5 percent growth for all of 2011. After the 4 percent growth to around $95 billion in 2010, Morocco’s GDP grew 5 percent during the Q1of this year and 4.2 percent in the second, according to the central bank. Government officials in Morocco are predicting that the country will continue to see strong economic growth in the next four years.

Morocco’s growing tourism industry is considered to be an important part of its future economic expansion, especially as it is helping to attract foreign investors to the country.

This could be good news for overseas property buyers who are looking to buy property in the North African nation.

The property experts at Experience International have stated that the country could be one to watch as we head into 2012, with it boasting a booming tourism market. Travelers are becoming more adventurous and destinations like Morocco has become more popular this year. The news is sure to interest potential buy-to-let investors looking to purchase Moroccan properties who will be able to benefit from the rise in visitor numbers.

With traditional European resorts becoming increasingly expensive for British travelers, Morocco will attract more visitors by offering better-value breaks through “a mix of cheap prices, year round good temperatures and a more exotic welcome”.

According to Travelzest’s Best of Morocco, the country is the ideal spot for individuals who are looking to go on a budget break and those who have invested in rental properties in Morocco could see a rise in the number of tourists visiting the destination this year as authorities are actively aiming to attract more holidaymakers to the country. Yassir Znagui, Tourism Minister said tourism receipts were expected to grow faster this year than in 2010 despite broader regional unrest and the Argana bombing, which killed 16 people.

Morocco too has seen a dip in tourism growth this year, but at least it is still seeing growth. Zanagui looking for investment opportunities for Morocco’s tourism industry said, “The country is very diverse. The resilience of our tourism sector will be tested this year.”

He commented: “The data we have so far and the response plan we have designed make us comfortable about the industry’s prospects.” He believed that a strong 8% increase on tourism receipts for the year as a whole is possible based on results registered to date.

According to statistics of the Ministry of Tourism, The North African nation welcomed Some 5.8 million tourists up to July 2011, a rise of 3.4% compared to the same period of last year. The year-over-year increase in April was up 18 pc, to 784,000. This upward trend has concerned the Kingdom’s major markets, namely France (+3%), Germany (+13%), the United Kingdom (+9%), Belgium (+14%) and the Netherlands (+9%).

According to research by the property company CB Richard Ellis, the abundance of new developments, many as large as 400 hectares, resulted in an oversupply of luxury villas and of the 10,000 homes available, 50 per cent were vacant last year. Many of the purchasers in the new developments were speculators who aimed to resell their homes quickly for a profit. But the financial crisis made potential buyers more conservative, especially in the UK as the country lost its appeal when property prices started plummeting in Spain and other European holiday destinations.

However, Morocco remains a popular tourist destination with increased tourism arrivals of 11.5 per cent last year to 9.3 million from 2009. Tourism figures were up 6 per cent in the Q1 of 2011 from the same period last year, despite the turmoil in the region, which included protests in the kingdom itself.

Yassine Hamdouch, a senior vice president at Jones Lang LaSalle said, ‘”Morocco has been evolving for the last several years. The investments have not stopped in tourism.” According to the tourism office reports, Mandarin Oriental luxury chains and the Four Seasons opened hotels in Morocco this year and a Ritz-Carlton resort is expected next year. Thirteen golf courses are scheduled to open in the next three years which adds to the current total of 27.

Morocco offers overseas investors several benefits which includes tax breaks, long-term visas and a financial system based on French laws. Moreover, Developers have started lowering prices and offering deals, such as free furnishings, to compete with the bargains in Spain and other European destinations.

Meanwhile, Nik Kapur, director at M2Morocco.com said that the rental market in the main cities is now starting to mature, with more professional agents and management companies appearing to give investors peace of mind. He said that developers are primarily targeting to the low to mid-end of the market, with this particularly noticeable in large urban areas.

There is an growing number of opportunities for investors in the real estate sector with rental values in the main cities are continuing to rise. Individuals looking to rent their properties to tourists in the country will be pleased by the news and government officials are already predicting further rises of around ten per cent increase in tourist visit this year. Moroccan government is hoping to incentivise property investors by offering tax breaks - such as removing capital gains and inheritance tax from properties in the nation.

Average yields are far higher than can be found in most developed countries and there is strong demand for holiday lettings in tourist hotspots like Marrakech. The “cosmopolitan city” of Marrakech is touted as being one of the more popular destinations for individuals looking for luxury and prime properties. the North African coastal destination can still expect appreciation to occur within the market with relatively low prices in comparison with other destinations in Europe.

The London-based Oxford Business group(OBG) has stated that after a strong growth in 2010, figures for early 2011 point to another bumper year for Morocco tourism. Despite the April bombing of a café in Marrakech, Confidence remains high and the effect of which appears to have been limited as the government continues to devise ambitious plans for the decade ahead. for the year as a whole in 2010, Tourist arrivals to Morocco reached 9.3 million up a strong 11.5% from the 2009 figures of 8.34m.The tourism receipts, grew by a healthy 6% on the previous year, to Dh56.2bn, notes OBG.

In the good news for rental investor in Morocco, this year is also off to a strong start, with all major indicators again showing healthy growth, added the source, noting that despite a dip in March, tourist arrivals increased 6 pc y-o-y in the first quarter of 2011, to 1.83 million. Arrivals in April increased by 18 pc y-o-y, to 784,000. Total tourism receipts for the first quarter increased by 6.7% y-o-y, to Dh11.1bn.

According to Overseas Property Professional reports, the strongest growth in the country’s real estate sector is within the top end of the market which in turn has fuelled the number of major developments which are taking place on the outskirts of the Marrakesh city. The city is also benefiting from a number of large-scale restorations that have taken place which have made it a hotbed for tourism. The booming holiday trade means that individuals looking to high end properties or rental properties have the opportunity to take advantage of the buy-to-let market.

Philip Arnott, of Morocco Properties has commented: “We are finding that the middle market, in which people were looking for a second home or a small riad has gone very flat since the financial crisis.”

The country’s national tourism office has revealed that nearly 13 new golf courses are due to open in Morocco over the course of the next three years. There are a total of 27 courses located across the nation, with the expansion planned as part of its Vision 2010 and Vision 2020 schemes. The news could prompt a number of international investors to Moroccan properties in order to take advantage of the ever-expanding market.

In related news, Strong economic growth in Morocco has been driven by an increase in real estate and construction activity in the country over the past decade. The annual growth of house prices in the country nearly doubled during the third quarter of this year, according to Reuter’s reports.

According to leading international agent Knight Frank, Morocco provides an exciting destination in which to invest in property, with buyers drawn to the country’s low property prices in comparison to Europe, the capital appreciation prospects and the ease in which foreign GDP will grow four per cent in 2010 and expects a rise of three per cent in foreign demand directed towards Morocco in 2010. Moreover, A report for the African Bank for Development highlighted that the exceptionally good levels of rainfall since last year brought 12% growth in Morocco’s agriculture sector and steady growth in the construction and tourism industry has helped offset declines in other sectors. Crucially, the country’s financial sector has significantly improved in recent years and does not hold securities or loans in financial institutions or international investment funds affected by the subprime property markets.

Knight Frank’s international research department in London has found that the residential real estate market in Morocco prices dropped by up to 20 per cent in the early half of 2009 but has now stabilized and is forecasted to grow again. At the top end of the market, there continues to be a sustained demand for super-prime residences and resorts in Marrakech, for properties priced above €2million.

In related news, CBRE, the world’s leading commercial real estate advisor reports that investors in prime Marrakech residential property in 2010 may double their money within 10 years. Residential experts, Aylesford International agrees with this forecast but are even more optimistic and believe that a prime property investment in Marrakech now, over a five year period, is likely to be extremely profitable.

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”.

Moroccan government decision to keep holiday home buyers as its core market served it well, with demand remaining strong with so much talk about Riads recently, and so much talk about new resorts in the past, what should these increasing droves of buyers be looking for, a Riad or a new pad.

The Moroccan independent hotel market is flourishing due to a boom in the popularity of riads with large investment by industry behemoths such as Kingdom Hotel Investments, Dubai Holdings and Qatari Diar. Investors in these traditional Moroccan houses include Germans, French and Spanish owners, with estimates that an initial investment of 80,000 to 1.5 million Euros (US $115,000 - $2.1 million) can return a 15% to 20% profit margin within one year of purchase.

Riads are boutique ‘resort alternatives’, consist of five to 25 rooms, have proved an attractive alternative to larger mass-booked luxury hotel chains that are more often than not inconveniently located. Despite the influx of foreign investment capital for real estate projects, Riad Meriem manager Cyrus Bozorgmehr said projects with international operators were unlikely to decrease demand for riad-style products.

Lafarge, the head of the Moroccan subsidiary of cement maker said that Morocco has experienced a construction boom in recent years as the government built new roads, rails and ports and drew record foreign investment in hotels and resorts to cater to growing numbers of tourists. Cement consumption had increased by more than 10 percent annually in the three years to 2009 when the rate of cement growth slowed to 3.4 percent because of the impact of the global financial crisis on inward investment.

Pierre Damnon, the managing director of Lafarge Ciments said that for the year 2010, despite the decline of the cement sales of 2 percent in the first three months of this year, he said that they are optimistic about cement market

Asked about expected results for this year, Damnon said that they are counting on cement market growth by 1 or 2 percent this year. “Our company will benefit from that growth,” Damnon told Reuters.

In more good news for property buyers in Morocco, The government has said it will maintain average 5 percent annual economic growth until 2012 on new stimulus plans ranging from higher infrastructure spending to subsidies for home buyers and poor families. The government also doubled investment spending from 80 billion dirhams in 2007 to 163 billion in 2009 and has said it will maintain that momentum this year and the following years until 2012.

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.