Morocco’s Real Estate Market Continues to Stagnate, Shows Limited Growth in 2023

Rabat – Morocco’s real estate market continues to stagnate, with growth in the real estate price index averaging -0.3% at the end of the second quarter of 2023, according to a report from the central bank, Bank Al-Maghrib (BAM).

The drop in real estate asset prices is the result of a 0.5% decrease in residential real estate prices and 0.4% in business premises prices, along with a 0.3% increase in land prices.

Meanwhile, the number of real estate transactions – a strong measure of demand – took a significant hit, recording a 12% decline.

Transactions especially slumped for residential properties, falling by a quarterly rate of 10.3%, reflecting weak demand for the housing market. Likewise, transactions for lands dropped by 15.7%.

While business premises showed signs of recovery in the first quarter of 2023, recording a 3.7% growth, the trend proved unsustainable and transactions plummeted by 17% in Q2 of 2023.

Morocco’s real estate market has been a primary concern for the country’s central bank for quite some time.

Before BAM’s decision to raise interest rates in September 2022 to combat inflation, the central bank had cited the struggling real estate market in Morocco as one of the main contributing factors.

However, since then, the bank has increased interest rates on four occasions, implementing the tightest monetary policy in the country’s history since it assumed control of macroeconomic policies in 2006.

The economic slowdown resulting from consecutive shocks has worsened this trend, but Morocco’s real estate market had been in decline long before the onset of the COVID-19 pandemic.

According to data from Global Property Guide, a research firm, Morocco’s real estate market began a steep and continuous decline back in 2017.

“Morocco’s housing market remains fragile, given the decelerating economic growth,” explained the Global Property Guide in a report published in May 2023.

“Property prices are gradually decreasing, transaction activity remains subdued, and the mortgage market continues to contract,” the report added.

Based on insights from the Global Property Guide, in 2022, nearly all of Morocco’s major cities experienced lackluster performance.

Casablanca, Morocco’s primary economic center, saw property prices rise by a modest 0.2% year-on-year, but when adjusted for inflation, the growth rate plummeted to -7.2%.

In Marrakech, Morocco’s second most promising real estate market, residential property prices remained unchanged throughout 2022 but decreased by 7.4% in real terms.

Meanwhile, the capital city of Rabat saw a 0.8% increase in property prices, which, when adjusted for inflation, translates to a substantial 6.7% decline in real terms.