Morocco’s Real Estate Market Slows, Amid Dropping Demand
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- 10 May 2023
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Morocco's real estate market is experiencing a slowdown due to the ongoing financial shocks and falling demand. According to a recent report from Bank Al-Maghrib (BAM), the country's central bank, Morocco's real estate index fell by 0.7% at the end of the fourth quarter of 2022 compared to the previous quarter. This downward trajectory in the real estate market has been ongoing since 2017.
The report suggests that the decline in the real estate index is primarily due to a 1.3% decrease in housing assets' prices and a 1.7% decrease in commercial real estate prices. As a result of the sliding prices, the number of real estate transactions fell by an annual 16% for commercial real estate by the end of 2022.
The drop in real estate-related transactions is more pronounced in some Moroccan cities than others. For instance, real estate transactions fell by 18%, 15%, and 7% in Kenitra, Fez, and El Jadida, respectively. Prices stagnated or decreased for all other major Moroccan cities.
The decrease in real estate demand is attributed to the economic hardships faced by the country as it tries to recover in the post-pandemic era. The country's central bank has expressed concerns over the state of the real estate market, and earlier in 2022, the bank avoided raising central bank interest rates to control inflation citing the condition of the real estate market. However, as inflation persisted, the bank raised interest rates twice, from 1.5% to 2%, and then to 2.5%.
In conclusion, the decline in Morocco's real estate market reflects the economic challenges faced by the country, and it emphasizes the need for financial stability and measures to boost demand in the sector.
