House price growth continues strong

Last Updated: Oct 04, 2007

House price growth continues strong

The VIPs arrived long ago – Sting, Mick Jagger, Princes Alexandra, David Bowie, Vanessa Branson, Alain Delon. Many occupy luxurious palaces around Marrakech. The tradition of Western interest goes back to Winston Churchill’s famous patronage of Marrakech’s beautiful Mamounia hotel.

Yet Morocco preserves an exotic and historic charm lost in many other Arab countries, plus a warm, dry, healthy climate, and a beautiful landscape, with its markets and traditional architecture, its car-free medinas and palaces hiding breathtaking gardens.

Morocco is now going mass-market. The coasts are a major destination for French tourists and increasingly for retirees. There is a whole associated infrastructure – guest houses, French-speaking newspapers and doctors, and an increasing number of French settlers.

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.  Unemployment fell in 2006 to 15.5% in towns (9.7% nationally), down from 18.4% in 2005 (11% nationally).

However national GDP is only expected to grow by 2.5% in 2007, according to the Finance Ministry, due to a poor harvest. This follows a spectacular economic performance in 2006, when GDP grew by 8%. Nevertheless indicators suggest an economy which is steaming ahead – electricity consumption up 22.9% on the year to March, industrial equipment imports up 12.7%. This is combined with an inflation rate of a mere 2.7%.

In mid-February 2007, a study published by the Georgetown University-based Center for Strategic and International Studies called "Arab Reform and Foreign Aid: Lessons from Morocco” concluded that Morocco provides a valuable lesson in political and economic reform – that top-down reforms can be highly effective, if skilfully and determinedly carried out, and that aid donors should lean towards countries where evidence of such commitment is to be found.

Morocco is expected to receive US$3 billion in foreign direct investments in 2007, mostly from the Gulf, according to reports in the leading newspaper Aujourdhui.

The forthcoming mass tourism explosion

A massive tourist/residential development program, Vision 2010 – of which the coastal part has come to be known as ‘Plan Azur’ - was launched six years ago to bring 10 million visitors a year to Morocco by 2010 and build 250,000 hotel beds, including 180,000 located in or around the cities. There will be 1,300 weekly flights into Morocco, with 15,6 million passengers per year. Many large international hotel chains have already built developments, including Club Med, Liwa, Accor, and Sol Melia.

Tourism almost invariably brings increased interest in buying in the country, and will likely have an enormous impact both on Morocco’s economy, and on property prices.

New coastal resorts included in Plan Azur:

Source: 7th International Tourist Conference handbook, Fes 2007

Six huge new tourist stations / residential developments in priority coastal resorts are at the heart of “Plan Azur”, including: Saidia (Oujda), Lixus (Larache), Mazagan (El Jadida), Mogador (Essaouira), Taghazout (Agadir) and Plage Blanche (Guelmim).

• Saidia is being developed by Fadesa and will have 30,000 beds and 3 18-hole golf courses – the first unit opens this year, 2007
• Lixus is being shared between 3 developers and will have 12,000 beds, and two golf courses – the first unit opens in 2009
• Mazagan is being developed by Resort Co, and will have 3,700 beds and open in 2009
• Mogador is being developed by 3 developers, will have 6,800 beds, and open in 2009
• Taghazout is being developed by Taghazout resort and will have 18,000 beds, and open in 2009
• Plage Blanche seems likely to be built by Fadesa, will have 19,500 beds and open in 2012.

Outside the mass market

The long Moroccan real estate boom, of course predates the mass market, and concentrates on the ‘authentic’ Morocco – and above all on giving Westerners a stylish life in exotic, traditional surroundings..

At the core of this has been the craze for buying Riads. It is not unusual to see Riads – traditionally-shaped Moroccan houses, with grand salons giving onto a central tiled courtyard, often with a garden at the center - offered on the Web for E500,000 or in the case of the most palatial, E1,000,000. Around 7,500-15,000 French residents live around Marrakech in these and other accommodations.

Will Morocco run out of Riads? “Oh no, there are 50,000 Riads in Marraketch and only 1,000 are sold to foreigners.” The coasts are also a major destination for French and other European tourists and those looking for a second home. After the boom caused by the French, “The English market is beginning,” says Charles El Fassy of the real estate agent Cabinet Charles El Fassy.

“We have had five years of French buyers. We thought: “Things cannot go on like this any more!” says El Fassy.  “But they are going on…it is beginning all over again, with the British.” Prices have increased threefold in four years, he says.

Morocco’s climate makes it a perfect destination all year round. It is hard to imagine – but it is possible to ski in Morocco, and mountain trecking is very popular.

The attraction centres of Morocco

The cultural and physical attractions of Morocco centre on its traditional cities – Marrakech, Fes, Meknes, Casablanca, and Essaouira – and on its one coastal resort, Agadir.

Marrakech

Marrakech was built in 1070 A.D.. It is famous for its palaces, open markets, and gardens. It is an extraordinarily exotic city, with its drama heightened by a location at the foot of the Atlas Mountains.

Marrakech is expecting three and half million tourists by 2010. Marrakech has a complete tourism zone, Aguedal. A public transport system carries tourists from the district into the city centre for its souks and traditional markets selling copperware, wool merchandise, and carpets and kaftans. There are no less than 27 5-star hotels in Marrakech.

Fes

For over 400 years, Fes was the capital of Morocco. Founded in 789 A.D, it is the world’s oldest medieval city, and the largest. Considered Morocco’s intellectual and religious capital, it is a UNESCO world heritage site.

It was at the peak in the 14th century, and saw a fresh burst of glory in the 17th century. Narrow streets prevent the entry of cars into much of the city.

Casablanca

Here the French built a city in a French idiom, heavily influenced by the architecture of the Arab-Andalusian Empire. The city centre has a modernist grandeur, with plenty of space and light. Casabablanca is large, modern, and agreeable, with five golf courses less that an hour away.

Meknes

Meknes was recognized as a World Heritage Site in 1996. Its physical location, on a plateau, made it Morocco’s trade crossroads. Its magnificent architecture was built by the 17th century Ruler, Sultan Moulay Ismail. Over 55 years he built palaces, mosques, gardens, and lakes. At his death the unfinished buildings including the royal palace - the Versailles of Morocco - which fills most of the old city.

Agadir

Agadir is Morocco’s main seaside destination. Beautiful beaches, luxurious hotels, an ultra-modern airport are all combined with a moderate climate. Agadir’s beach is spectacular. 10 kilometres in length, it is clean and wide. Agadir enjoys a continuous breeze from the Atlantic, so that the temperature is pleasant all day.

A major earthquake completely destroyed the city in 1960. It was rebuilt from scratch. Agadir today is a modern city.

Tangier

Tangier has a louche reputation dating from the 1920s, when it was an outpost for British paederasts. Then in the 1950s, beats, dropouts and writers like Burroughs and Bowles, Ginsberg and Kerouac, Leary and Eldridge Cleaver came to Tangier. It is a messy, rather ugly city. Now its coastline is being covered with resorts and new developments.

Essaouira

Essaouira is popular with independent travelers. This is partly because of its long beach, and partly because of its laid-back atmosphere. Yhe town has long been magnet for Moroccan poets and creative talent. In the Place de L’Indépendence, which is the main square in the centre of Essaouira, there are dozens of cafés and restaurants. It is a pleasant place to eat, drink, and watch the world go by.

Summary

Some make the analogy with Turkey. Morocco appeals to European tourists, holiday-makers and retirees for much the same reasons as Turkey. Like Turkey, but arguably more so, Morocco has large qualities of well-preserved architectural history. It has charm, exoticism, and a historical built environment which elsewhere in the Arab world has been largely obliterated by modern buildings. And it has geographical variety – the Atlas mountains, and wonderful beaches.

It is difficult not to suspect that Morocco’s success in attracting both summering and settling Europeans will eventually outpace that of Turkey.