Morocco’s government is going all out to pump-prime its housing market. The Moroccan housing market was somewhat weakened by local and global crises in 2007 and 2008, and the government is trying to lure Moroccans living abroad to buy properties in the country, by offering 25-year 100% loans up to US$100,000.
Unlike most countries in the Middle East, Morocco has long encouraged foreigners to purchase and invest in property in the Kingdom. Foreign citizens can freely buy, rent and invest in land and real estate in Morocco (except agricultural land).
Central to the government’s plan of boosting real estate and tourism investment is Vision 2010. The ambitious plan laid down in 2001 by Morocco's King Mohammed VI, aimed to increase tourist arrivals to around 10 million.
Despite the global economic slowdown, the government was undeterred and continued to increase spending for the construction and renovation of roads, airports, and seaports. Work began in April 2009 on a new high-speed railway connecting the key cities of Tangier and Casablanca. It is expected to be completed in 2016.
The increase in government spending combined with good harvests since 2008 has helped the Moroccan economy grow at impressive rates, despite the global crisis. The economy grew by 5.6% in 2008, and growth is expected to have been 5% in 2009. GDP growth of 3.5% is forecast in 2010.
Unlike most countries in the Middle East, Morocco has long encouraged foreigners to purchase and invest in property in the Kingdom. Foreign citizens can freely buy, rent and invest in land and real estate in Morocco (except agricultural land).
Central to the government’s plan of boosting real estate and tourism investment is Vision 2010. The ambitious plan laid down in 2001 by Morocco's King Mohammed VI, aimed to increase tourist arrivals to around 10 million.
Despite the global economic slowdown, the government was undeterred and continued to increase spending for the construction and renovation of roads, airports, and seaports. Work began in April 2009 on a new high-speed railway connecting the key cities of Tangier and Casablanca. It is expected to be completed in 2016.
The increase in government spending combined with good harvests since 2008 has helped the Moroccan economy grow at impressive rates, despite the global crisis. The economy grew by 5.6% in 2008, and growth is expected to have been 5% in 2009. GDP growth of 3.5% is forecast in 2010.
Analysis of Morocco Residential Property Market »
RENTAL YIELDS
Last Updated: Sep 12, 2011
Prices of Riads in Marrakesh have fallen significantly over the past year, and a price of US$2,000 per square metres (sq. m.) is now typical (in mid 2009 astronomical prices equivalent to US$3,000 were being asked, sometimes up to US$4,000). A 500 sq m. riad which might then have sold for the equivalent of US$1.5 million would now fetch US$1 million.
The riad market was foreign-oriented. It over-reached itself and suffered an overblown speculative frenzy. Then the crisis hit and the ‘rich money’ left town. In contrast, prices of apartments in Marrakesh have stayed virtually unchanged, at around US$2,000 per sq. m. The same is true in Casablanca.
Gross rental yields in both Marrakesh and Casablanca are moderately attractive at between 5.5% to 7.3%, with an outlier in Casablanca ,where small apartments (70 sq. m.) can give gross rental yields of 9%.
The riad market was foreign-oriented. It over-reached itself and suffered an overblown speculative frenzy. Then the crisis hit and the ‘rich money’ left town. In contrast, prices of apartments in Marrakesh have stayed virtually unchanged, at around US$2,000 per sq. m. The same is true in Casablanca.
Gross rental yields in both Marrakesh and Casablanca are moderately attractive at between 5.5% to 7.3%, with an outlier in Casablanca ,where small apartments (70 sq. m.) can give gross rental yields of 9%.
TAXES AND COSTS
Last Updated: Jan 19, 2012
Rental Income: Net rental income is obtained by taking 40% off the gross rental income. The tax rate rapidly progresses from 0% to 38%, so that the top rate of tax is actually 24% of gross income.
Capital Gains: Profits on the sale of property are taxable at 20% of any profit, but with a minimum tax of 3% of the sale price.
Inheritance: There are no inheritance taxes in Morocco.
Residents: Residents are subject to progressive income tax rates on their worldwide income.
Capital Gains: Profits on the sale of property are taxable at 20% of any profit, but with a minimum tax of 3% of the sale price.
Inheritance: There are no inheritance taxes in Morocco.
Residents: Residents are subject to progressive income tax rates on their worldwide income.
BUYING GUIDE
Last Updated: Nov 15, 2007
Round trip transactions costs, i.e. the total cost of buying and selling a property, are around 11.56% to 12.69%. The buyer pays most costs, but the seller pays half the real estate agent’s fees. Additional expenses are involved in buying non-titled property.Buyers need to be very careful when considering purchasing property in Morocco. In the main, it is not advisable to purchase any land that is not titled (as "Muhafida"). There are at least 3 types of land titles, and most of them are very doubtful. There are also in Morocco many nice-seeming but dishonest advisors. Clear titles can be very difficult to find, at least at a fair price.
LANDLORD AND TENANT
Last Updated: Jul 31, 2006
Rent: The rent can be freely agreed between the parties. The landlord can also ask for a guarantor to be named, who is legally obliged to pay the landlord for any debts owed by the tenant.
ECONOMIC GROWTH
Last Updated: Feb 01, 2010
Sustained economic growth
The Kingdom of Morocco is an intricate mesh of Arabic tradition and sensibilities with modernity. A former French protectorate, it has a population of 32 million and GDP per capita of US$2,830 in 2008. After very slow economic growth in the 1990s, the government began a series of structural reforms of the labour market and financial sectors, and the sale of mobile licenses, and Morocco’s economy has been doing quite well. King Mohammed VI, who succeeded in 1999, is a dynamic monarch who has brought substantial reform to Morocco, and some national reconciliation following the torture which marked the early years of his father’s rule.
Although GDP growth continued to be erratic, the economy never contracted under his term. Economic growth was particularly strong in 2001 (7.6%), 2003 (6.3%) and 2006 (7.8%). The last time the economy contracted was in 1997 (-2.2%).
The sustained economic growth let to drop in unemployment from 11.4% in 2003 to 9.6% in 2008. In urban areas, the drop in the unemployment rate is more pronounced, from 19.3% to 14.7% within the same period. In Q2 2009, unemployment dropped to its lowest level of 8% before rising to 9.8% in Q3. Inflation was managed to an average of 1.38% within the period of 1999 – 2005, down from 6.2% from 1990 to 1995.
Good harvests led to higher farm incomes and domestic consumption in 2008 and 2009. The economy grew by 5.6% in 2008, and is believed to have grown by 5% in 2009. In 2010, GDP growth is expected to slow to 3.5%.
Public works spending and state investment are projected to grow by 20% in 2010. Projects funded by this increase in spending include the expansion of Jorf Lasfar power station, wind farms in Tangier and Tarfaya, and other power-generation plants. The spending increase will lead to a budget deficit, after surpluses in 2007 and 2008. The budget deficit is expected to be around 2.7% in 2009, rising further to 4% in 2010.
The government is forecasting inflation of around 2.8% in 2009 and 2010, down from 3.9% in 2008.
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