Marrakech a magnet of foreign investment in real estate
MARRAKECH - Morocco’s real estate market has been showing signs of recovery for the first time in six years, particularly in Marrakech, which is increasingly attracting foreign buyers.
Higher-end villas in Palmeraie, an oasis with several thousand palm trees outside Marrakech, were in higher demand from foreigners in 2018-19, data indicate. Moroccan riads — traditional mansions with courtyards — have also seen increased demand.
The increase in foreign investment in Morocco’s real estate sector, especially in the Medina of Marrakech, resulted in soaring housing prices that became unaffordable for many residents, who relocated to suburban areas.
While they brought in much-needed hard currencies, foreign investments in housing increased inequalities, a key problem of the Moroccan economy. Lavish hotels, estates and restaurants in the main cities are surrounded by slums and rural areas of profound poverty.
“Over the past couple of years, there has been a lot of property construction. When people come to Marrakech now, they will see a lot more cranes than five years ago when there wasn’t much construction going on.” Said Nik Kapur, an agent with M2Morocco, a real estate agency in London and Marrakech.
The main developments are taking place in Gueliz, which is known for modern restaurants, fast-food chains and big brand stores, and Hivernage, the spot for high-class hotels, sophisticated restaurants and stylish bars. Both are in the newer part of Marrakech.
Morocco has a great reputation in terms of obtaining construction permits. The 2019 Doing Business rated Morocco very highly — 30th out of 160 countries, on procedures, time and costs for obtaining a permit.
Massive upgrades of Morocco’s airports and motorways have made travel to the country much easier.
“I’ve been going back and forth to Marrakech for 15 years. The new part of the city, particularly in Gueliz and Hivernage, has seen a dramatic change with new developments,” Kapur said. “Foreigners who used to live in the old town are slowly moving out and relocating in lavish and modern guesthouses. Everyone wants to live there.”
The French rank first for buying properties because of Morocco’s proximity to Europe and historically strong business ties between the French and Moroccans. They are followed by British, Italian and Spanish buyers.
Nationals from the Arab Gulf countries have also been purchasing properties in the high-end market.
“Arabs from the Gulf have been mostly purchasing properties with a price tag of ($1.1 million-$5.6 million). These are used as holiday homes, rather than permanent residencies,” Kapur said.
“The luxury market of Marrakech, which is concentrated in three neighbourhoods, has average prices three times higher than the general market,” he said.
“Most appealing in terms of investment is the neighbourhood of Gueliz, with an average price per square foot of $207 for recent properties, which has seen a huge growth in demand over the last two years, followed by the more classic districts of Hivernage ($362 per square foot) and Palm Grove ($312 per square foot), which are in discrete and elegant areas with easy accessibility to the main services of the city,” he added.