Developers are refusing to bring down property prices even as flats remain unsold, leaving many young couples and families unable to buy homes without taking on mortgages stretching beyond 25 years, economist Mohamed Jedri has said.
Speaking to Le360, Jedri said demand for housing remained strong, particularly among newly married couples, those preparing to marry and families hoping to move out of rented accommodation. But prices had risen well beyond what many could afford.
“Construction materials have genuinely become more expensive, while demand from young couples and families looking to move from renting to homeownership is very high,” he said.
“The main problem is that many households can no longer keep up with these extremely high prices. They exceed their financial means, forcing people either to abandon their plans or take out loans with substantial monthly repayments over more than 25 years.”
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He said the loss of purchasing power had hit low-income households and the middle class particularly hard.
Despite this, developers were unwilling to make concessions on asking prices, he maintained.
“Many developers would rather keep an apartment or an entire building unsold than accept a price below what they are hoping to get,” Jedri said.
He also said that some developers were demanding unofficial payments, known locally as noir, over and above the advertised price, undermining the government’s direct housing assistance program.
Under the scheme, eligible buyers receive Dh100,000 for homes costing up to Dh300,000, or Dh70,000 for properties priced between Dh300,000 and Dh700,000.
But a flat listed at Dh300,000 could end up costing Dh350,000 to Dh360,000 once the additional payment was included, Jedri said.
He argued that the practice effectively deprived buyers of part of the benefit intended for them under the state scheme.
Families buying lower-priced homes also had to contend with the cost of repairs, fittings and other work after purchase, adding to the financial burden.
Amine Nokta, deputy head of the National Federation of Real Estate Developers, disputed the suggestion that developers could simply lower prices.
He said affordable housing had become increasingly difficult to build because of rising land prices, construction materials and wages.
Major infrastructure projects were offering higher pay and drawing workers away from residential construction, leaving developers struggling to recruit labor at rates they could afford.
“The affordable-housing project is no longer generating profits for developers and has become exposed to losses,” he said.
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According to Nokta, some developers had abandoned projects after finding themselves unable to meet construction costs. A loss on one project could be enough to push a company into bankruptcy, he warned.
He said the cost of land had risen sharply compared with 2013, 2014, 2016 and 2017, making the Dh300,000 price ceiling increasingly difficult to meet.
“Believing that Dh300,000 is enough is an exaggeration,” he said.
Developers needed to sell flats for at least Dh400,000 to Dh500,000 to make a profit, he argued.
Nokta also criticised the previous government’s affordable-housing model, saying it had failed to keep pace with changing costs or meet demand for affordable and mid-range properties.
He called for the direct housing assistance program to take account of differences in land and construction costs between cities.
The same subsidy, he said, could not adequately serve buyers in Casablanca and in smaller cities such as Khénifra, Khémisset, Taza and Azemmour.
For Casablanca, Nokta proposed raising the subsidy to between Dh200,000 and Dh250,000, compared with the current maximum of Dh100,000 for homes in the lowest price category.
He said the higher assistance would allow developers to cover their costs, avoid losses and offer better-quality housing.
