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.
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.