Covid-19, a major risk for real estate

” […] Before 2020, the real estate sector in Morocco was already experiencing a continuous crisis. The reasons are mainly intrinsic and they operate in a vicious circle. The relatively high prices of goods in the market are the main obstacle to the growth of the sector. This has been exacerbated by the scarcity or unavailability of land in popular areas, especially in large cities and their close peripheries, ”said Zakia Medkor in an interview with Africa Midi.

According to her, the construction sector today suffers from a structural anarchy which is counterproductive for its development. “In the absence of a building code, roles and responsibilities are poorly defined and it is the quality that suffers,” she stressed, noting that the failures that may result are not of such as to encourage the confidence of local consumers or foreign investors or even to encourage support from other sectors such as insurance.

“After the onset of the crisis, demand for real estate fell significantly, following buyers’ questioning of their purchasing decision and their (sometimes justified) fear of seeing their purchasing power decrease,” notes the Underwriting manager for technical risks and specialties. This inevitably led to the accumulation of unsold stocks among developers and affected their treasuries ”. She also mentions the new redistribution of customer preference after the confinement experience. She cites as an example the orientation of urban families towards single-family homes and second homes. “On the financing side, interest rates in Morocco remain high for a large segment of the population,” she added.

To reverse the trend, it suggests strengthening demand as a priority by restoring consumer confidence in the quality of built goods, including economic products, through the implementation of the Construction Code and ensuring its application; through the implementation of the law on compulsory insurance for construction sites and ten-year civil liability; by extending (and why not by introducing) the reduction in registration and registration fees for the acquisition of eligible goods; by setting up incentives for the benefit of buyers (administrative fluidity, aid, etc.) and in particular for first-time buyers; by setting up guarantee agreements with banks aimed at supporting the fall in borrowers’ interest rates, etc.

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