Morocco’s Housing Market Faces Affordability Crisis as Prices Soar

Between a dwindling supply and growing demand, the Moroccan real estate market has seen a mixed evolution in 2024. This imbalance between supply and demand has led to a rise in prices, making it difficult for middle-income households to access housing. According to the updated data from Bank Al-Maghrib (BAM) and the National Agency for Land Conservation, Cadastre and Cartography (ANCFCC), residential transactions fell by 17.3% in the first quarter of the year, a 17.5% drop for apartments, 18% for houses and 4.2% for villas.

"Today, the admittedly bitter observation is that there has been a lot of stock on the market for a few years. This proves that demand is scarce. This crisis affects almost all segments, both new and old, with the exception of the luxury residential segment which still finds buyers," said Mohamed Lahlou, president of the Regional Union of Real Estate Agencies (URAI) Casablanca-Settat, to Challenge. According to him, the decline in household purchasing power and the rise in the cost of bank credit explain this situation. According to BAM, the average rate applied to real estate loans was 4.36% in the first quarter of 2024. Banks have also tightened the conditions for granting real estate loans.

"On the one hand, interest rates have increased and banks no longer finance real estate acquisitions 100%, and on the other hand, the decline in purchasing power makes saving almost impossible for households. It is difficult to revive the real estate market under these conditions," Lahlou warns. Faced with this situation, the government launched the housing assistance program in January 2024 which, according to Lahlou, "is currently an alternative." The president of URAI also calls on the Executive to "also review taxation, in particular the reduction of registration fees, make the TPI payable, recover unbuilt land..."

To get out of this crisis, it would be necessary to "focus on strengthening demand as a priority," suggests Zakia Medkor, head of technical risk underwriting at Allianz Maroc, calling among other things to "restore consumer confidence in the quality of constructed goods, to implement a Building Code and to ensure its application," as well as the application of the law on mandatory insurance for construction sites and decennial civil liability. The expert also recommends facilitating administrative procedures for first-time buyers, and "subsidizing and developing a product adapted in terms of cost, need and financing of the different social strata, particularly the middle class."

Lahlou also stressed the urgency of setting up a regulatory framework for real estate intermediation. "It has been since February 14, 2014 that we have proposed the draft law, and since 2017, the file has been at the government secretariat," he recalled, before adding: "It is urgent to activate the draft law concerning our profession, because real estate agents will be called upon to accompany future buyers as part of the new housing assistance program, and we cannot allow just anyone to provide this intermediation."