MAGAZINE 47 SPOTLIGHT

Morocco has been edging quietly into the public eye over the past few years: open a glossy travel or lifestyle magazine and you’ll regularly see Kate Moss shopping Tangier, or Bryan Ferry lazing by the pool in Marrakech. But of course the select few (and the French) have been travelling to (and settling in) Morocco for years. Its continued appeal lies in the fact that it has retained its exotic, historic charm: think dazzling souks, traditional Moorish architecture, pedestrianised medinas and breathtaking palaces, plus a varied landscape and a year-round dry healthy climate.

We all want to follow in the footsteps of the stars and it looks like Morocco is about to go mass market (in the nicest possible way of course). The coasts have been a major destination for French tourists and retirees for over five years, and Marrakech now has about 15,000 permanent French residents. Not surprisingly travellers and settlers from elsewhere in Europe are beginning to get in on the act.

Incredibly there are already 27 five-star hotels in Marrakech. And Agadir, Morocco’s main seaside destination, boasts 85 percent rental occupancy during the peak season. Property owners from Tangier to Essaouira are seeing a surge in demand for holiday lets.

Launched in 2002, Vision 2010, a massive tourist/residential development program, aims to bring 10-million visitors a year to Morocco by 2010. There will be 1,300-weekly flights into the country, with 15.6-million passengers per year. As many as 250,000 hotel beds will be provided, including 180,000 located in or around the cities. Many large international hotel chains have already established a presence, including Club Med, Liwa, Accor and Sol Melia.

The surge in tourism has sparked interest in buying in Morocco, and property prices have increased three-fold over five years. That said prices are still 50 percent lower than in any other established European market. The average cost per square metre for a property in Morocco is €750 to €1,500 (HK$8,500 to HK$17,000), compared to €2,000 in Spain and €2,400 in France.

Property prices in Morocco are as varied as its cultural and physical attractions. Those on the look out for cut-price properties are heading to the hills outside the main cities where farmhouses (pre-renovation) can be snapped up for as little as €25,000. Rental opportunities are fewer than they would be in Marrakech or on the coast but they still exist. Consider, for instance, that Fes and Meknes are both World Heritage Sites, and that there are five golf courses within an hour’s drive of Casablanca.

For lovers of authentic Morocco (including Mick Jagger, David Bowie, Vanessa Branson and Alain Delon) nothing but a riad – a traditional Moroccan house, giving onto a central tiled courtyard and gardens – will do. For a home like this you can pay €500,000; but post-renovation, the price tag can read €1 million. Fortunately Morocco is unlikely to run out of riads any time soon: of the 50,000 in Marrakech only 1,000 have been sold to foreigners.

Canny investors have their eye on Plan Azur, a key component of Vision 2010, which will take in both the Mediterranean and Atlantic coasts. Luxury properties, with world-class sports and leisure facilities on site, are now available off-plan with attractive mortgage schemes and guaranteed rental income.

The starting prices for properties such as these averages at around €85,000. At Mirador Golf, near Tetouan, prices for a one-bed with views of the Mediterranean and the Rif Mountains start at €30,600. In Tangier, you can pick up a property at Tanjah Beach and Golf Resort from €118,700, and at the Royal Moroc near Agadir prices start at €84,000.

Morocco received around US$3 billion in foreign direct investments in 2007, mostly from the Gulf, and the government is determined to bring in overseas investors. Economic indicators are positive: since the accession of King Mohammed V1, Morocco’s economy has been booming; unemployment is below 9 percent, national GDP is growing steadily and the inflation rate is a mere 2.7 percent.

Foreign real-estate ownership is encouraged in Morocco, and your first step is to open a local bank account so that you can convert your funds into Dirham. Then get yourself a real-estate agent (simsaar), and an English-speaking lawyer. Legal fees range from 1 percent to 5 percent of the property value plus 10 percent VAT; a simsaar typically charges the buyer 2.5 percent of the purchase price as commission.

Once the purchase price has been agreed, put down a deposit but don’t be tempted to pay in full. Houses are often put on the market while they are still occupied, and you will have to wait for the occupant to move out before you can get the key.

Like anywhere in Europe, it’s usual to have a notary acting for both parties. Once the signatures on the sales deed have been notarised, the sales deed needs to be registered with the relevant registration office. The notary fee ranges from 0.5 percent to 1 percent, plus 10 percent VAT. You can then pay the stamp duty (€1.72 per page of the contract), and apply for the listing of the registered deed to the land registry (1 percent fee). In addition, when purchasing a house, you’ll need to pay a 2.5 percent registration, and add another 2.5 percent if you are purchasing undeveloped land.

An additional notary tax is fixed at 0.5 percent of property value but Morocco is known for its low property taxes. While there is no inheritance tax if property is passed to a family member, capital gains is just 20 percent, reduced to 10 percent after five years and 0 percent after ten years. What’s more, new properties are exempt from most property taxes in the first five years of ownership. So Morocco might be your ideal location should you be looking to buy-to-flip.