Real estate: operators' revenues to combat market sluggishness



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DR.

Wide angle. The real estate market in Morocco has stagnated for a few years, a remarkable fact in a country where demand is generally stronger than supply. A slowness that professionals attribute to problems of a structural, cyclical or even social nature.

Observers accuse real estate developers who, in all categories combined, did not take into account market requirements and their evolution over time. This is one of the main reasons for the slow real estate market in our country. Faced with this, real estate companies are tirelessly seeking solutions to break the impasse and show ingenuity to thwart sales in the so-called social housing sector.

This is the case of Addoha, who recognizes that this issue is at the heart of his concerns and that, especially in relation to the cost of land, he is working on the possibility of rethinking the concept of social housing by proposing, for the same price, apartments in F4.

Read also: Real Estate: Addoha launches development plan "2020 cash priority"

The Saada group, in turn, proposes a new pilot concept of social housing: a duplex of 70m². Although demanding, this type of accommodation presents a new model of sociability combining intimacy and modernism, bringing a touch of foot (finishes, elevators, green spaces …) sign of Saada, thus a revolution in the so-called social habitat.

The Jamai group, a pioneer in the real estate sector, defends a new approach, that of proximity. All the social housing programs of the group offer proximity to the centers of interest of the citizens: administrations, hospitals and mosques, thus guaranteeing a maximum number of potential buyers.

Economic crisis or crisis of confidence?

In turn, Mohamed Lahlou, president of the Moroccan Association of Real Estate Agents (AMAI), attributed this withdrawal to a crisis of confidence. "Small new projects in R + 5 are flowing much faster, but large projects are no longer being sold as before, there have been disappointments, problems, litigation … customers are afraid to buy into the plan."

Read also: Housing for the middle class: the big hit

In an interview with The Economist, (March 5, 2019), Taoufik Kamil, president of the National Federation of Real Estate Developers (FNPI), argues that "Almost all indicators are red, as highlighted in the latest report of the Board of the Ministry of Economy and Finance". And to add: "The property remains out of reach for many of our fellow citizens […] the high cost of ownership derives essentially from the high cost of land, taxes and taxes imposed by the state on both the developer and the buyer. " A statement that joins those of other property developers who are accused of rising consumer prices impacting household finances, personal contribution is no longer possible and the sale can not occur.

Read also: Big scam real estate in Morocco: 800 buyers protest in London

The second house under the magnifying glass

Some people think that this is the time to buy, the more skilled, they remain on the lookout, the real estate may sink further into a deep lethargy in the uncertain end. According to Mr. Larbi Bounejja, real estate agent, the pace of sales should decline further, especially in residential real estate. And to add: "The craze experienced by the consumer, MRE and foreigners included, for the second home is no longer relevant, even worse the owners of this type of housing today sell at a loss, thus competing with the developers who have placed a strong stake in this niche, placing their know-how and involving large financial means.It adds to this that the problems related to taxes, taxes and fees related to the second home are exorbitant and therefore, families prefer much more the purchase in the informal housing.

A little over 1800 Notaries share the meager misery

On the other hand, the notarial activity is also falling drastically. Several notaries have seen their turnover fall by 75%, says Maître Nourredine Berzouk, a notary in Casablanca. "The decline in real estate transactions has a direct impact on our profession"he insists. On the banks side, despite the recently described historically very low interest rates, obtaining a loan is part of the roadblock. Banks are very reluctant about their concessions. The crisis of confidence that distinguishes our financial institutions leads them to ask customers for more guarantees and then more paperwork to produce. Participating banks are not spared. This new financing model, despite knowing a great wealth, registers great delays in the treatment of archives (3, 4 or even 5 months), "It's incredible, time is money", answers Me Berzouk. A large number of customers give up, the more resilient, they resist, it is still necessary that they have good salaries. Data from the High Commission for Planning (HCP) show that 40% of those who are willing to buy an apartment receive salaries between 2,000 and 4,000 dirhams.

On another level, Me Berzouk evokes the importance of real estate standards, put online since 2015 by the Directorate General of Taxes (DGI), which should standardize prices per square meter in each region of Morocco. Unfortunately, these real estate barometers have disadvantages, especially if the selling price is lower than the pre-set price. In this case, the tax – Real Estate Tax (TPI) – payable is calculated on the basis of the standard and the seller will be taxed on a price that he did not receive. A nightmare for the seller who prefers to keep his property in moderation until further notice.

Another area, not unimportant: the land not developed. The owners of the latter are forced to pay the Underdeveloped Land Tax (TNB). A tax paid per square meter, which weighs more heavily on small donations than on large fortunes.

In the meantime, market lethargy continues to rage in major kingdom cities such as Casablanca, Rabat, Tangier, Agadir and more in Marrakech, Fez and Meknes. Prosecutors, real estate agencies, real estate experts and other actors on the ground are unanimous: the real estate sector is in crisis and the end of the tunnel is not yet visible.

Khalid Tegmousse (trainee journalist)

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