Rabat – Morocco’s mortgage market is poised for new rate increases in the coming months, according to a recent report from Afdal, an online mortgage comparison service in Morocco.
The report, as cited in local news reports, argues that Morocco’s real estate market is set to see new rate increases in the coming months. Despite the grim prospect, the research also highlights numerous opportunities for buyers, sellers, and investors.
Afdal’s analysis shows that real estate rates have remained stable throughout the year. As of April, the average rate stood at 4.57%, unchanged from the previous month.
The report further breaks down the rates, indicating an average of 4.5% for a 15-year mortgage and 4.75% for mortgages exceeding 25 years.
However, Afdal emphasized that despite the overall stability, there are significant rate variations among different banks, with differences of up to 25 basis points for loans exceeding MAD 1 million ($100,000) over 25 years.
Afdal’s market survey suggests that the anticipated rate hikes will likely occur by the end of May or in June, further tightening the mortgage market.
The report also warns that property rates are unlikely to decrease in the near future and may even accelerate in the coming months, according to industry professionals.
The upward trajectory in rates will increase pressure on the real estate credit market, potentially limiting the borrowing capacity of households.
While the current economy seems to pressure the mortgage market, Afdal highlights that the real estate market still presents attractive opportunities for buyers, sellers, and investors.
The report indicates that apartments remain the most sought-after category, accounting for the majority of property searches. The average price of apartments stands at MAD 906,425 ($90,000), which – according to Afdal – reflects their affordability and accessibility for potential buyers.
Regarding other types of real estate, villas –which represent a smaller share of the market– continue to attract affluent buyers seeking high-end residences with luxurious amenities.
Afdal points out that the upscale properties play a crucial role in diversifying the market supply, catering to the specific requirements of a discerning clientele.
However, the rise in property rates, coupled with inflation, poses challenges for aspiring homeowners.
Afdal advises potential buyers to consider various factors such as income, personal contribution, savings, and bank account management, as these elements play a vital role in negotiating favorable mortgage rates.
While income remains a significant criterion, other avenues for negotiation include increasing the down payment, maintaining a consistent savings habit, negotiating loan insurance rates, and seeking assistance from real estate brokers with expertise in financing.
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