Morocco’s Real Estate Market Remains ‘Weak’ as Demand Slumps

Rabat – Morocco’s real estate market continues to slide in 2023, with real estate transactions – a strong measure of demand – falling by a sweeping 14.8% in the first quarter (Q1) of 2023.

According to a quarterly update from Bank Al-Maghrib (BAM), Morocco’s central bank, demand in the housing market is especially depressed as it dropped by around 17% at the end of the first three months of 2023.

The overall growth of the national real estate market remains largely sub-optimal averaging a mere year-on-year 0.8% in Q1 of 2023, BAM indicated.

While business premises are benefiting from the post-pandemic recovery in economic activities, scoring a year-on-year growth rate of 3.7% in Q1 of 2023, growth in the housing market is flat.

The average annual growth in the price of an apartment in Morocco is 0%, and the price of housing units (villas, houses, and apartments) is slightly devaluing by an annual rate of 0.1%.

The state of Morocco’s real estate market has long been a primary concern for the country’s central bank. Prior to the BAM’s decision to hike interest rates to tame inflation in September 2022, the central bank cited Morocco’s struggling real-estate market among the prime factors.

Since then, however, BAM has hiked interest rates four times, adopting the toughest monetary policy the country has seen since the bank became in charge of the macroeconomic policies in 2006.

The slowing economy due to the consecutive shocks exacerbated the trend, but Morocco’s real estate market was spiraling long before the COVID-19 outbreak.

Data from Global Property Guide, a research firm, show that Morocco’s real estate market started a steep and continuous decline in 2017.

“Morocco’s housing market is still weak, amidst slowing economic growth. Property prices are falling gradually. Transactions remain depressed. And, the mortgage market is continuously shrinking,” the Global Property Guide explained in a report published in May 2023.

According to Global Property Guide insights, in 2022, almost all of Morocco’s major cities recorded “lackluster” performance. Casablanca, Morocco’s foremost economic hub, saw property prices rise by a mediocre 0.2% year-on-year, but the growth rate when adjusted to inflation drops to -7.2%.

The city of Marrakech, Morocco’s second most promising real estate hub, saw residential property prices remain unchanged during 2022 but fell by 7.4% in real terms. Meanwhile, the capital Rabat saw a 0.8% growth in property prices, which when adjusted to inflation is, in fact, a 6.7% drop in real terms.