What´s happened to Morocco?

[andyk2]

I know that property investment destinations have their "seasons" (Cape Verde, Bulgaria, Brazil ) and then everybody forgets about them, but what has happened in Morocco seems pretty unique.

The VAT went up last month, but that´s less of a rise than JDF or Oasis stuck on their prices in a week 12 months ago. Even 6 months back everybody was getting excited about Emaar and that never happened, so has the whole Plan Azur gone to pot or is something happening so quietly that it has passed me (and numerous others) by?

What about the rest of the Mediterranean coast, Tangiers, Fez, Marrakech? If anybody has any genuine information about the apparent death of the Moroccan market, please share it with us because all I see on here is adverts for properties that will never sell.

Thanks,

 

[Investy]

Emaar is well and truly alive but things are taking time. I know the sales manager of Hamptons that has been bought by Emaar. He says the reason for Emaar aquiring Hamptons is purely to access the high end UK market.

Plan Azure - Saidia progress photos (and now videos on Youtube) show good progress with about 3 hotels almost finished and the shoping centre and marina well built. Golf course one looks great on Azure devlopments website progress photo section.

The planning system seems far stricter than Ive encountered elsewhere which is one reason for delays however I think this is a manifestation of the Moroccans desire to create world class resorts rather than the ad hoc style of Bulgaria, Turkey and so on.

Already Ive noticed people I know going to Morocco for hols - this is new.

As with all things new, most people will not accept the new reality until it becomes part of the fabric of thier lives.

There is no reason why Morocco wont become as popular as Egypt as a tourist destination, afterall its a lot closer, and the develop far more ordered (the Egyptian stuff is very poor build quality - again this ad hoc free for all mentaility).

As you say, everything goes in waves. Cape Verde was high profile 2 years ago, but now I see litlle mention of it. I think this is just the lag between plans and completion.
The inital buzz of early investors dies down whilst thye wait for stock to be built.

Marrakech Im seeing featured on a number of TV property programmes.

If you are Andy from Property Showroom fame, Im surprised you say properties will never sell as you were very enthusiastic when you were selling Moroccan property in 2006 - I have the emails still and there are many posts for us all to see on housepricecrash where you sing the praises of Morocco.

Brazil - a long way to fly and dozens of 'luxury' developments that all pretty much the same, and nothing new. Nothing to match the uniqueness of the Plan Azure sites for facilities. Very seasonal also and why go off season when there's not the immense sports and leisure facilities to enjoy?

 

[michaelbush]

What about the rest of the Mediterranean coast, Tangiers, Fez, Marrakech? If anybody has any genuine information about the apparent death of the Moroccan market, please share it with us because all I see on here is adverts for properties that will never sell.

Thanks,

How do you know they are not selling? if you look at thecompletepropertysolution.com site you will see two Moroccan offers, both researched to make sure investors get a capital gain and a good exit strategy. It depends what you want from an investment, or if indeed you are an investor. If you want holiday homes then these will always be difficult to sell on, since they attract only a tiny percentage of the available buyer market

 

[steveparr]

I think properties are still selling in Morocco, but to get a good return on your investment may take a while. The infrastructure is still pretty poor, emergency medical services, flights etc. Rentals for the next few years will also be low, expect 2months max a year (North Morocco). However Morocco is making great steps to improve its infrastructure and imo it is at least a 5 year plan.
I have bought in Tangier City so my comments are based for North Morocco.

 

[michaelbush]

I think properties are still selling in Morocco, but to get a good return on your investment may take a while. The infrastructure is still pretty poor, emergency medical services, flights etc. Rentals for the next few years will also be low, expect 2months max a year (North Morocco). However Morocco is making great steps to improve its infrastructure and imo it is at least a 5 year plan.
I have bought in Tangier City so my comments are based for North Morocco.

Rentals for a holiday property will always be seasonal. If you buy to let for local people you will have all year round rental at a good return! 30% deposit spread over the build and then 70-80% mortgages available. This is a service we can provide our investors.

 

[steveparr]

Rentals for a holiday property will always be seasonal. If you buy to let for local people you will have all year round rental at a good return! 30% deposit spread over the build and then 70-80% mortgages available. This is a service we can provide our investors.

Yes but access to the rental will determine the volume. I would be careful letting to locals, they have tennants rights and you could come unstuck.

 

[michaelbush]

Yes but access to the rental will determine the volume. I would be careful letting to locals, they have tennants rights and you could come unstuck.

Of course they do!! They have even more in the UK!!! Would you want a rental contract broken just because the owner wants to use the place for a couple of weeks holiday? The particular development we have attracts a middle class, and they will be looking after the property far better and without the hassle of having holiday let problems, changeovers to organise etc. repairs to attend to etc. You are in the UK (I assume) - what is easier, long term with all responsibilities for the client to pay water, electric bills etc, or holiday lets with all the responibilities that go with it and no guarantee that you will let for enough weeks to pay the costs?

 

[steveparr]

Of course they do!! They have even more in the UK!!! Would you want a rental contract broken just because the owner wants to use the place for a couple of weeks holiday? The particular development we have attracts a middle class, and they will be looking after the property far better and without the hassle of having holiday let problems, changeovers to organise etc. repairs to attend to etc. You are in the UK (I assume) - what is easier, long term with all responsibilities for the client to pay water, electric bills etc, or holiday lets with all the responibilities that go with it and no guarantee that you will let for enough weeks to pay the costs?

Unfortunately you are talking rubish and I think you know this.
No I'm not residing in the UK but am English.
Would you prefer to let your property to a local?
A local will want the property for a long time, hopefully due to work commitments. The advantages of this is you will hopefully have a low monthly rental income.
The disadvantages are numerous, if they lose their job and cant pay the rent you cant just say goodbye to them. The legal system would take months to evict if ever.
Would you like that?
In an emerging market it is better, initially to rent for short term holiday letting.
Take care

 

[michaelbush]

Fine- if you have a holiday home then holiday lets are what you probably want - whether you will get enough of them to pay the mortgage is another thing! Whether you can find someone, or some agency to manage professionally all the responsibilities of holiday letting, get you your bookings etc, arrange to collect and pay your utilities etc, may well determine whether holiday lettings are all the agent who sold you on it, said it would be!! Holiday lets used to be around one month rent per week. After costs you will need around 16 weeks rented out, guaranteed, minimum , to give the same net return after costs of a long term let. Low monthly rentals = low capital cost, so what is the difference except the investment is NOT short term. In Germany for example the average tenant expects to live a very long time in the same property. YES check out all the options, particularly if you have borrowed money for your purchase, which seems to be the majority of cases.

 

[steveparr]

No not borrowed money, but thats not really the issue. A long term let to a local over a longer period of time will obviously generate a low monthly return with no flexibilty to increace your own marketing.
As I said earlier there are big dangers in long term lets in an emerging market eg after they have rented for 12 months they have a right to rent the property for a further 5 years. This could present quite a few headaches.
Its not that long term lets should be out of the equation, it is just too early to go down that route. Long term lets are the last resort at this stage.

 

[michaelbush]

Many "investors" rely on income to service a mortgage- the tourism market is the one that is emerging- the locals have been renting for a long time. My expertise is in Spain and Brazil, I do not know the tenancy laws in Morocco, but even in Brazil I would recommend long lets or Aparthotels where you do not have to service the accommodation and all is taken care of for you. Here in Brazil they have fixed terms with the ability to renew, indexed linked. My company offer in Morocco is selling to the local people as well so there is an exit strategy as well at completion to sell on. The expected yield on the "low" rental would still be around the 6-7.5% on capital invested. If you pay £40-50,000 for a property you do not expect to get £1000 per month!

 

[redangel7861]

I cancelled my reservation in Athena Golf - Saidia today and opted instead to go for a five star development in Hurghada, Egypt.

I've already purchased in Marrakech (Atlas Golf),but decided against a second property in Morocco as I did'nt want to put my eggs in one basket. The increase in TVA, the falling pound against the MAD has made investing in Morocco less desirable, especially in a super resort that will take between 5-8 years to establish itself.

Don't get me wrong, Saidia will be great when finished but to get decent returns on this development will take time. In the mean time there are much better investment opportunities in other countries offering much better value for money.

 

[michaelbush]

The falling pound- it is falling against all currencies including the euro. There are many opportunities in many countries, but one must examine why you are investing, do you want holiday homes in several countries far from home or are you looking for a certain profit! Refurbished riads are selling very well, and you can profit by having one refurbished with everything managed from purchase reform and sale. The best investment for profit I have seen in Morocco. If you would like the full investor report I can e-mail it.

 

[steveparr]

I cancelled my reservation in Athena Golf - Saidia today and opted instead to go for a five star development in Hurghada, Egypt.

I've already purchased in Marrakech (Atlas Golf),but decided against a second property in Morocco as I did'nt want to put my eggs in one basket. The increase in TVA, the falling pound against the MAD has made investing in Morocco less desirable, especially in a super resort that will take between 5-8 years to establish itself.

Don't get me wrong, Saidia will be great when finished but to get decent returns on this development will take time. In the mean time there are much better investment opportunities in other countries offering much better value for money.

Totally agree that Morocco will take 5-8 years to become established and a small investment will become very beneficial.
Can you let me know which development in Egypt you are looking at.
Thanks

 

[redangel7861]

sdvpm.

There is a new pre-release five star development in Hurghada called Hania Beach. I've reserved 4 studio apartments at 25k each on pre-release. There is also a 60% bank mortgage being arranged that will be written into the contract.

There are no vat or capital gains issues in Eqypt.

There is a thread dedicated to this development on the Egypt Bulletin Board. Feel free to have a read through and make your own judgement.

 

[steveparr]

redangel, will do, thanks

 

[Lee Filkins]

"He says the reason for Emaar acquiring Hamptons is purely to access the high end UK market."

Is it for this reason that Emaar does not even tell Hamptons as what will be released, when it will be released and at what price. When Emaar last released they had their launch in Tangiers. Hamptons phoned me next day to inquire if I was interested. When I asked them the above stated questions. Hamptons was very apologatic and accepted the mess Emaar has placed them into. I think Hamptons have given up on Emaar and calls made to hamptons are now on voice mails and messages left are not replied.

I believe Emaar paid £80 million for Hamptons and if they are trying to capture top end of the market, they are doing a fine job.

 

[Investy]

The massive Saidia Plan Azure development was planned with extended season in mind, which is key for sound investment.

Essentially it is a giant Centre Parcs with sun. The hotel down the road from a Centreparcs may well suffer from normal seasonailty yet Centreparcs are busy year round.

Why is this?

As an investor I was intrigued as to why Centreparcs manages to extend the season. Clearly it's down to the large array of leisure facilities that appeal COME RAIN OR SHINE.

I was never interested in a typical touristic property.

 

[Naoufal]

I don't understand that you could say there is no real estate selling. I am an agent myself, I sell a lot of appartments/villa's because I provide good guarantees on paper discussed with buyer and developer. I don't know why people invest in resorts if they have relative small budget, I recommend appartments in Tangiers. Growth between 20-30% per year. You all must know something, no one ever says this is in the forum, the biggest investor in real estate is the moroccan living abroad in Europe. They provide a huge economic injection, knowing that will come every year to see relatives. So this is different if you compare it with Egypt or other countries. And you also must know that moroccans abroad starting to earn more, so the house that they buy is also more expensive. And believe they are keen on Tangiers, wether they live somewhere else in Morocco they still want an app. for holiday. This and knowing that the freezones and harbor will provide more than 100.000 employees, they all need a house. And just as said here, the tourism growth and foreign investments (not only in real estate but in more different areas) makes Tangiers a booming market with sometimes unbelieveable growth. Tangiers profits from it's (upcoming)industrial and tourism(moroccan abroad, foreigners) And everything is beeing sold. For example: I bought an appartment a year ago for 700eu per m2,already built, in the centre of Tangiers( near the upcoming store: El corte Ingles). I sold it two months ago for 950 eu per m2. The appartment is 96 m2, imagine my profit being almost 35% . This is Tangiers at the moment, it will remain for 5-10 years ;-)

 

[Naoufal]

And oh yeah not to forget the riads are also very intersting to look at, just as Michael Bush said