According to Bank Al Maghrib’s real estate price index, based on data from the national land registry office, overall sale prices in Morocco increased 5% in the first quarter of 2011 and 1.9% in the second quarter compared to the same quarters in 2010, though second-quarter 2011 prices were down 1.6% over the start of the year.
Prices in the second quarter rose across all Morocco’s major cities y-o-y, except in Fez and Tangier. Kenitra saw the quarter’s highest increase, at 23%. Casablanca, the country’s economic capital and largest city, predictably accounted for the most sales, representing 34% of the total, followed by Marrakech with 24% and Meknes with 12%.
The second quarter’s annual increase was driven by the residential segment, which accounted for approximately 66% of sales. The segment increased by 3.8% on second-quarter 2010, driven by a 5.4% increase in apartment prices. These accounted for the bulk of residential sales and 60% of all property sales, in spite of a 25% y-o-y fall in transaction volume.
Looking at real estate trends over the longer term, almost all major urban areas have seen real estate prices increase since Bank Al Maghrib’s retail price index began in 2006. The eastern city of Oujda has seen the largest rise, with real estate prices up 22% on 2006 figures, followed by Meknes and Rabat, which have seen gains of 16% and 14%, respectively. Prices in Casablanca and the tourism centre of Marrakech have risen by 4% and 3%, respectively.
Meanwhile, several major real estate development projects are nearing completion. For example, the developers of the 75-ha, €563m Bab Al Bahr development in the Bouregreg valley, adjacent to the capital, said on September 15 that housing units in the development’s marina district will be ready for delivery in the first quarter of 2012, with units in its Cité des Arts district to follow in June.
The first 306 units in the Cap Tingis project, developed by local conglomerate Holmarcom on 60 ha of the Malabata Cape west of Tangier, will also be delivered in June. In Tangier itself, the Dh2bn (€179m) Tangier City Centre development, which will include offices, apartments, hotels and a 30,000-sq-metre shopping mall, is SET to open in December next year, according to a statement by a representative of its Spanish developer, Inveravante. The firm is also working on a similar multi-use development (Anfa Place) in Casablanca’s Anfa district, which will contain a 36,000-sq-metre shopping centre.
Meanwhile, the highly anticipated Dh2bn (€179m) Morocco Mall, which at 200,000 sq metres will be the largest shopping mall in the Middle East and North Africa and will rank among the 20 biggest in the world, is scheduled to open October 21. The complex will bring Galleries Lafayette, a French department store, and Fnac, which specialises in electronic goods, audio-visual media and books, to North Africa for the first time.
Social housing also remains an important real estate growth driver. Social and low-cost housing developers have been realising up to 30% returns on apartment sales, according to local media, thanks in large part to tax incentives, such as removing capital gains and inheritance tax from properties, designed to stimulate the sector.
Property developers over the last 18 months have declared an interest in building 810,000 social housing units, with contracts for 736,000 units already signed. A push by the government to improve accommodation options for lower-income segments of the population, as well as to buttress the advances made during the Villes Sans Bidonvilles campaign, has meant that capacity in the social housing segment is SET to increase dramatically in the coming years.
Demand for subsidised lodging is certainly there. Local media report sales of social and low-cost housing during the summer were significantly stronger than other real estate segments. Morocco’s largest developer, Addoha, was reported in early September to have been selling around 150 low-cost units per day since the start of Ramadan in late July and to have a full order book stretching into the year 2013.
The ongoing development of large real estate projects is SET to continue the sector’s growth, particularly as demand for social housing rises. With various segments of the real estate sector going strong, Morocco’s urban landscape should see significant expansion in the coming year.