Rabat – Real estate is yet another sector of the economy in Morocco that took a hard hit amid the COVID-19 pandemic.
It is now six weeks since Morocco transitioned into the second phase of its gradual confinement easing. Recent numbers show early, though timid, signs of recovery.
Prior to COVID-19, real estate prices were increasing around Morocco though numbers declined as the pandemic took hold.
The current upturn post-confinement results from wide range of measures put in place to boost the economy.
The measures boosting real estate aim primarily at stimulating demand through various tax and financial incentives, including lower interest rates, reduced registration fees, suspension of the repository, etc.
Real estate professionals welcomed the stimulus measures, Karim Tazi, Managing Director of Consulting and Transaction at the A. Lazrak Group and member of the Royal Institution of Chartered Surveyors (MRICS), told Morocco’s state media.
Changes in consumer behavior have also played a major role in the recovery. Real estate investment is considered safe and valuable, especially during times of crisis.
Therefore, many households in Morocco have turned to real estate as a means of retaining capital in uncertain times.
Since June, the middle class has been very active in the search for apartments, lots of land, and small villas on the periphery, Tazi noted.
“Visits and signings of sales compromises between the promoter and the buyer have increased significantly,“ Tazi added.
“However, closing transactions takes longer because of financing. The accompanying measures are there, but the banks must also play their part in unlocking funds.”
A slight rebound for home loans
There has been a slight increase in real estate loans across Morocco, resulting from the reduction of Bank Al-Maghrib’s (BAM) key interest to 1.5%.
The increase also comes from the full release of the reserve account to the banks.
According to BAM figures, real estate competitions increased, year-on-year, by 1.6% during the month of last June. At retail, housing credits increased by 1.8%, while housing crowdfunding increased by 46.9%.
Similarly, loans to real estate developers increased by 0.4% compared to June 2019.
In the midst of COVID-19, banks must make a concerted effort to innovate and adapt their services to ensure the best options for their customers.
Bank al-Maghrib recently received a license from the Dubai International Financial Centre (DIFC) that will allow the Moroccan bank to facilitate $200 million in investment transactions and trade finance within the first year.
Similarly, Bank Of Africa (BOA) recently launched its first online real estate loan service and credit underwriting platform. BAM pledged “transparency” in terms of information communicated throughout the process, as well as remote to meet the demands of their customers.
BOA launched the new platform after Morocco’s government called for digitalization reforms amid the COVID-19 crisis.
Their anticipated target audience is the Moroccan diaspora, allowing clients to check their mortgage application and receive commercial offers.
