Moroccan Property, Banks lead the way.Good for Property Investors in Morocco?

March 3, 2011

So we have uncertainty in Europe, some concerns that BRIC nations may suffer inflationary pressures or even overheat, and turmoil in the Middle East. Investors seeking returns with a different risk profile, may well turn to a country like Morocco, for property investment

Experience shows that poorer economies tend to grow faster and eventually converge with others. So why should this not be the case for Africa?

What’s more, Morocco’s infrastructure is shaping up nicely.

Morocco Property – Morocco’s Financial System

A recent evaluation of banks in MENA countries from 1994-2008 (Middle East and North Africa) reveal the Moroccan financial sector, to be among the most efficient in the area.

There is a strong correlation between a well-functioning financial system and economic progress. So many countries in the area are following either International Monetary Fund (IMF) or World Bank programmes to improve efficiency and economic performance and in particular establishing more private versus public sector ownership.

Morocco, does however, have a relatively high concentration of banks, with the top 3 holding 91% of total banking sector assets, which may hint at a lack of competitiveness. But yet the banks in Morocco, have the highest efficiency scores in the region, at 85.9% vs the region’s average score of 64.6%, (meaning banks could reduce costs by 35.4% and still produce the same outputs).

These figures take into account the quality of available technological support and infrastructure in the region. Moroccan banks are deemed to work with the best technology in the region.

Moroccan Property – Other attractions

So Morocco has an interesting profile for the overseas property buyer. What’s more, it is in very close proximity to mainland Spain, think Tangier, and this is another reason it generates so much interest.

A new pleasure port and marina is being built 35km East of Tangier, with new conference centres and hotels. The new port is 30 minutes from the city and will be one of the biggest in the Mediterranean, eclipsing its Spanish counterpart, Algeciras, not just in size but also in the quality of its new modern facilities.

Tangier itself is an International Free Trade Zone and therefore exempt from certain taxes to encourage foreign investment.

Further along the Mediterranean coast is the only purpose-built seaside resort for tourists, Saidia, with a huge choice of tasteful properties to lure the overseas property buyer and another massive Marina for serious seafarers and holiday makers alike.

Sources: IMF work based on BankScope a global database

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