Real Estate Sector Faces Unprecedented Crisis as Coronavirus Halts Construction and Sales

In an interview with l’Économiste, Karim Amor, the vice-president of the National Federation of Real Estate Developers (FNPI), stated that "construction sites are stopped at 95%, and sales offices are deserted". Even worse, "the sales promises concluded before the confinement are all blocked because, even the notaries and adouls have stopped their activities," said the official, who stresses that the sector has been in very poor condition since the advent of covid-19.

According to the official, even the entry into enjoyment of "goods acquired before the advent of covid-19, as well as the obtaining of occupancy permits, receptions and various authorizations and certificates, are suspended". The employment of thousands of people is also strongly compromised in a matter of a few weeks. And there is no proof that with the lifting of confinement, everything will immediately return to normal, because "buying a home is a life project and can only be done with a projection into the future," says Karim Amor, who indicates that "the banks have a role to play in extending the credits granted to all stakeholders," reports l’Économiste.

The coronavirus has only accentuated a latent crisis in the sector that was caused by "the mismatch between available housing and the purchasing power of citizens and their financing capacity". A situation that was already preventing developers "from easily selling their goods in various regions of the kingdom".

That is why, in order to avoid "a cascade of bankruptcies, a systemic banking risk and hundreds of thousands of destitute buyers," the vice-president of the FNPI pleads for the sector to "receive special attention from the public authorities". He also thinks that lowering prices could revive the sector. According to relatively well-informed sources, developers are now working to dispose of their stocks at exceptional rates. Relaxations in the conditions of acquisition must be granted to citizens. And they need the support of the public authorities to avoid sinking completely.