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Everything you need to know is included in our Morocco Property Pack
Are you thinking of investing in property in the land of Moorish Architecture? Are you wondering whether now is the right time to make a move?
Market timing is a subject where people have different perspectives. Your Moroccan colleague may suggest that it's currently a good time to buy property, but your friend residing in Rabat might suggest waiting for a couple more months.
At SandsOfWealth, when we create articles or update our pack of documents related to the real estate market in Morocco, we trust facts and data, not opinions or rumors.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Morocco.
Let's delve in!
How is the property market in Morocco these days?
Morocco is, today, a relatively stable country
Neutral
If you want to invest in properties, prioritize stability as it minimizes legal, regulatory, and political risks. It is an information you need as a foreigner who might buy a property in Morocco.
These days, Morocco is experiencing a notable degree of stability. The last Fragile State Index reported for this country is 70.1, which is an acceptable number.
Morocco has a strong central government and a long-standing tradition of monarchy, which has provided the country with stability and leadership. Additionally, Morocco has benefited from strong economic growth in recent years, which has helped to reduce poverty and inequality and has provided its citizens with increased economic opportunity.
Let's examine other data now to see if it's the right moment to purchase property in this country.
Morocco will keep growing in the next 5 years
Positive
Before buying a property, take a look at how well the country's economy is doing.
According to the IMF, Morocco will end 2023 with a growth rate of 3%, which shows the country is on the right path. Regarding 2024, the experts say 3.1%.
Besides that, the economy will keep growing since Morocco's economy is expected to increase by 14.1% during the next 5 years, resulting in an average GDP growth rate of 2.8%.
The expected sustainable growth rate in Morocco indicates that the country is likely to experience steady economic growth, which is beneficial for real estate investors as it increases the potential for capital appreciation and rental income. Additionally, the growth rate suggests that the market will remain stable, providing investors with a safe and secure investment opportunity.
In addition, there are other metrics to consider.
Morocco's population is growing but getting poorer
Negative
Population growth and GDP per capita should be on your mind when you're in the market for real estate because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Morocco, the average GDP per capita has changed by -0.1% over the last 5 years. It's not a good number. However, the Moroccan population is growing (+3% in 5 years).
No high rental yields in Morocco
Neutral
It's time to analyze the rental yields..
It's the annual rental income of a property divided by its price. For example, if a property in Morocco is purchased for 1,000,000 MAD and generates 40,000 MAD in annual rental income, the rental yield would be 4%.
Based on the data provided by Numbeo, rental properties in Morocco promise gross rental yields from 3.1% and 5.8%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Morocco.
It indicates a moderate level of income generation.
Everything you need to know is included in our Morocco Property Pack
In Morocco, expect moderate inflationary effect
Neutral
Simply put, inflation is the phenomenon of rising prices.
It's when your usual tagine dish in Marrakech costs 80 Moroccan dirhams instead of 70 Moroccan dirhams a couple of years ago.
If you're considering investing in a property, high inflation can offer you several advantages:
- Property values have a tendency to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
- Diversifying your portfolio with real estate provides stability during periods of inflation.
- Tax advantages, such as depreciation deductions, can help offset the impact of inflation.
As per the IMF's forecasts, over the next 5 years, Morocco will have an inflation rate of 12.0%, which gives us an average yearly increase of 2.4%.
This data shows that Morocco could face inflation in the near future, which would lead to an increase in prices. Consequently, purchasing a property could become more expensive. However, if you buy now, there is a chance that your investment will appreciate, allowing you to sell it at a higher value in the future.
Is it a good time to buy real estate in Morocco then?
Time to conclude !
2024 holds promise as a favorable period to consider property investment in Morocco, primarily due to the expectation of continued growth over the next five years. Morocco's projected economic growth signifies a positive environment for real estate investment, as a growing economy typically correlates with increased demand for housing and properties, potentially leading to capital appreciation.
Notably, Morocco's status as a relatively stable country enhances its appeal as a destination for property investment. Political and economic stability provide a conducive environment for investors, instilling confidence in the market and assuring a more predictable investment landscape.
While high rental yields might not be a prevalent feature in Morocco's property market, the combination of growth potential, stability, and other factors can compensate for this aspect. Investors can still benefit from long-term capital appreciation and steady income from rental properties.
Although moderate inflation is expected, it's important to recognize that real estate can act as a hedge against inflation. Property values often have the potential to rise in response to increasing prices, offering a means of preserving and potentially increasing an investor's purchasing power.
Despite concerns about the population's financial well-being, the favorable signals of growth and stability, along with the potential benefits of property as an inflation hedge, make 2024 a year to consider property investment in Morocco.
We genuinely hope this article has been helpful and informative to you!. If you need to know more, you can check our our pack of documents related to the real estate market in Morocco.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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