Friday, August 17, 2007

Property search Morocco.

Housing markets seem to have been on an unprecented run throughout much of the past decade. I thought that being in Morocco, a developing country, may have spared me the worst of arriving late on the scene. Oops!

To dissect the price of buying a new home, you are buying a plot of land and the cost of construction for the home. It shouldn't be too much more than the going rate for the land plus the going rate to build.

My interest in owning a little place in Morocco is to have somewhere to leave the collection of belongings my wife an I have accumulated over the previous two years. The cost of a decent small appartment, I anticipated to be in the $45,000-75,000 range.

In and around Rabat would be the ideal place. Being in touch with the expat community here, we could likely find someone to rent the place year round while Siham and I go to live in Canada.

So Siham called the Moroccan version of a real-estate agent, known as the Simsar. It's their business to be familiar with the network of other Simsars in the area of Rabat. Together they know everything for sale and for rent.

The first place we checked out was about a fifteen minute drive from us, out in the suburb called Temara. It was an appartment complex, and I have to admit the appartments were nice, only way way way too expensive.

For a 102 square metre appartment they wanted around $150,000

This is quite far out of Rabat, and surrounded by some pretty shoddy neighbourhoods.

Strike one.

The following day our search led us down the street from where we are currently renting. It was a partially filled development complex.
Something that confuses me about Rabat is that they built poor neighbourhoods right in the midst of rich ones - and the price of land in the rich neighbourhood inflates the price in the poorer neighbourhood to nearly the same level. The cost to buy a home in a beautiful neighbourhood surrounded by leafy tree lined streets and wide sidewalks is about the same price as it costs to buy in the raddy potholed streets with uneven dying trees, unpainted buildings and fences overgrown with weeds, right next door.

Our second day searching led us to one such disparity neighbourhood a couple of kilometres down the road from where we currently live. The neighbourhood is a dumping spot for expropriated families from around Rabat. In return for the land they did't own, they get an appartment. We inquired about building a home. A piece of land, so tiny it would be about the size of a deep double garage, would cost us around $110,000. That's more expensive than just outside of Toronto where I grew up.

My wife described the squatting culture of Rabat. While some families are legitimate farmers who happened to live and work the land for more than a generation, others are families who find a promising piece of land likely for future development and squat. They build their shack and wait for the gov't to relocate them to a nice appartment.
Next step, they sell or rent out the appartment, find another promising place to squat, and do the same thing over again.

I get home, in disbelief over the sky-high cost of owning a tiny piece of land. From our current rented appartment, I look out my back window and see nothing but forest for miles and miles. At least another 100,000 homes worth of land just in my line of sight. Yet a tiny piece of land a kilometer to the west costs $110,000

To build a little three floor home only costs another $50,000.

But there wouldn't be any backyard. The neighbours house is attached to yours. There's no yard for the kids to play safely, just a garbage-filled patch of uneven dirt nearby. There's no park with swings, people haven't even heard of grass. No football pitch anywhere within walking distance. The roads would be potholed within a few years. It's every man for himself. Buy your tiny patch of high priced land and build a home.

To compare. Back home in Canada, my sister and her husband just bought a $250,000 house. Four bedrooms, unfinished basement, and acres of land surrounding it.

What I don't understand is how the middle-class Moroccan can afford a home even with no surrounding land? Where's the money coming from for this balooning middle class who are driving up the cost of property in Rabat?

Salaries here are much much lower than Canada or Europe. A middle class salary in Morocco (of which there isn't nearly the same proportion as Canada) might be half or a third what a counterpart would make in the West. Shouldn't housing prices reflect that gap?

Price of 90 square metres on the outskirts of Rabat - $110,000
Price of a three story home built on it - $50,000

Some people swear that property is the best investment there is.
If you're looking at Rabat, I disagree. There are so many uncontrollables. Politics and policies, natural disasters, economies, global warming, baby boomer generation in decline, interest rates.

Our search continues. The next round will take us north, to the beaches, or to somewhere well outside of Rabat.


taamarbuuta said...

If I were going to invest in Morocco, it would not be Rabat - I'd go for the Meknes medina (far less developed than that of Marrakesh or Fez, and still cheap) or Asilah/Larache.

Morocco property said...

I think today Morocco is a promising emerging market and a huge growth in developments to the region is living proof of this. The Moroccan government's commitment to increase the numbers of tourists is a real incentive for developers and investors alike.
As the country offers everything from economical apartments to million pound villas, Morocco property investment is attracting all types of investors, from the first time buyer to the more seasoned investor, all of which are keen to tap into this emerging market.
Morocco property investment is proving to be very lucrative with prices doubling within a year, and according to property reports, property price growth is set to continue well into next year. Property experts predict growth figures of 40% within the next three years with a rental yield of 10%.

afalani said...

I think what's being said about properties in morocco is somewhat overstated. The prices are not going up by 10% or even 5% each year. My faviorite spot in Morocco is near Tandgier which offers close location to europe (spane is just a few miles away) and a fantastic climate. Further south near Aghadir is far too hot in summer. I have reserved a penthouse near Asilah right on the beach and I can't wait for it to complete so that my family and I enjoy the holidays there and hopefully rent it the rest of the year.

Morocco Property Investment said...

Morocco is not only a mosaic of cultures and a land of contrasts, Morocco is more than that. It's a popular booming country in property investment, land development and tourism with a quality of life and beautiful weather all the year. Do't trust words go there for a holiday and check it out yourself.

Between the Mediterranean and Atlantic , Europe and Africa , Morocco has always been a land of exchanges and encounters. Since early Antiquity, it has been a land of successive invasions, by the Phoenicians, then the Romans and the Byzantines. Here, Berber, Arab, Jewish and Christian cultures have learnt to live together. Each has contributed its genius, making Morocco a land of tolerance and shared beauty.
This heritage has many other jewels, like the architectural treasures of the ramparts of Asilah and Essaouira, the Roman ruins of Volubilis, the Arab-Andalusian constructions of T├ętouan, Fes, Marrakech… the more cosmopolitan urban style of Rabat , Casablanca or Tangiers or the imposing beauty of large fortified villages, with their beautiful stunning sandy beaches, Rif and Atlas mountains, ksours, great valleys of the south and magic desert.
In this modern country, with its rich living traditions, time quickly takes on another dimension. As travellers are constantly given opportunities to discover and escape, they will naturally find the haven of peace of their dreams, ideal for relaxation and rest, in this generous land full of tourism and real estate business opportunities.