Morocco seduces and flatters to deceive a little. Five years ago there was little in the way of new build; today it’s everywhere – the coast; Marrakech; half way up the Atlas Mountains – seriously.
The glut of new build and the global economic slowdown mean there’s little profit to be made in the short-term on new property. The market in traditional properties – riads – is strong (200 per cent + growth since 2001) but it’s a hands-on job to renovate one in order to make a profit.
Attractive tax concessions include: low CGT, no inheritance tax, no property tax for first five years; purchase costs are on the low side too. On the downside rental income tax is a shockingly high 40 per cent and even after allowances you will still pay an effective 12 to 15 per cent in Morocco.
Approximately 50 per cent cheaper than the average European property price and rising at an estimated average of 20 per cent a year since 2000-2007, Morocco’s been good to those who got in early. In 2008, there was a slowdown, but for the right property in the right area (not the planned coastal resorts as there is an oversupply) there’s a good few years’ growth in North Africa’s brightest investment spot of the last half decade.
On paper there’s plenty of potential. Marrakech rental yields on apartments are an average of 7.23 per cent, according to GlobalPropertyGuide.com. The smallest apartment of 60 sq. m. generates the highest yields of 8.04 per cent versus 6.56 per cent for an apartment twice its size. Apartment prices in the area reach up to US$1,572 per sq metre for 120sq metre apartments, with an average of US$1,515 per sq metre.
The trick is to be able to reach the renters. Independent travelers – who make up most of the 7.4 million (and growing by one million yearly) annual tourists – prefer bespoke accommodation to chain hotels. To see if the figures stack up for your investment plan, look at the weekly rental prices on holiday lettings websites: http://holidaylettings.co.uk/ and http://www.ownersdirect.co.uk
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Amanda Lamb is on her travels finding you the ideal location for your new house
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