The Moroccan real estate sector is undergoing a significant crisis characterized by unsold inventories, a slowdown in construction starts, a sharp decline in demand, inflation, soaring raw material costs, land scarcity, and a lack of coordination between public and private actors, alongside a mismatch between supply and demand. As reported by L’Économiste, industry operators argue, “The market must start from an analysis of the demand from potential buyers and households,” highlighting that the era of producing large volumes of housing and trying to sell them at any cost is over, leading to substantial stocks of unsold properties. A paradigm shift is necessary.
Currently, Morocco has an urbanization rate of 65%, expected to rise to 70% or even 75% in the coming years. “There will be a need to produce housing that anticipates this new demand, especially offerings that are affordable for potential buyers’ purchasing power,” insists Anice Benjelloun, Vice-President of the National Federation of Real Estate Developers (FNPI). Achieving this goal will require overcoming several challenges, with land availability being the most critical. The scarcity of land creates value, with land prices becoming increasingly expensive in major urban centers, particularly in coastal cities like Casablanca, Rabat, Tangier, and Agadir.
Today, land cost constitutes nearly 50% of the total cost of a property in Morocco, compared to 20 to 25% in OECD countries, as noted in the report.
Inflation and the rising costs of construction materials present another significant constraint. Since 2021-2022, there have been price increases of 40% to 50% for some materials, with others doubling or even tripling in cost. Glass, wood, marble, and aluminum have seen the most substantial price hikes. These are “unavoidable constraints that ultimately impact the final selling price,” explains the situation, reflecting the tough conditions the sector faces.
This article outlines the urgent need for a strategic overhaul in Morocco’s real estate market, focusing on aligning supply with actual demand, tackling land scarcity, and managing the escalating costs that affect affordability and development in one of North Africa’s key economic sectors.
