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Morocco Leads Africa as Global House Prices Go Stratospheric

Morocco Leads Africa as Global House Prices Go Stratospheric

Globally, the market for real estate was hard hit due to the pandemic related restrictions. However, transactions volumes in many countries around the world recovered strongly resulting in new demand coming in from more properties being bought outside cities. House prices have accelerated especially in developed countries, where mortgage finance is effective. Strong house prices heaves have taken place in European countries, such as Slovak Republic, Turkey, Germany, Sweden, and Russia.

The International Monetary Fund (IMF) in its initial evaluation of a 5.2 percent has now revised the 2021 growth forecast for the global economy to 6.0 percent amidst accelerated vaccine distribution and the influx of new governments inducement efforts in many countries including the continued adaptation of economic activity to subdued mobility.

According to Global Property Guide in its “Global House Price Survey” for 2020 revealed that, the COVID-19 Pandemic remains scourge to the real estate industry. However, some countries did experience unusual increase in housing prices around the World.

Africa’s Housing Markets Remain Weak

Africa’s real estate markets was stunned as morocco topped the continent. The survey considered 53 countries with only three African countries making the list including; Morocco, Egypt and South Africa. The survey made use of inflation-adjusted figures.

Morocco

According to the Morocco’s Central Bank, Bank Al-Maghrib, the number of real estate transactions in the country fell by 9.5 percent despite the decrease in prices. However, in the Global Property Guide report, Morocco’s housing market is gradually improving, with residential property prices rising by 1.08 percent during 2020, following a decline of 1.75 percent in 2019 and 0.51 percent in 2018. During the latest quarter of 2021, house prices increased 2.98 percent. The Moroccan economy will expand by about 4.9 percent this year, partially offsetting the 7 percent decline last year.

Egypt

According to the survey, “Egypt has maintained a positive economic backdrop despite the effects of the COVID-19 pandemic and this will remain supportive of its real estate industry with demand for commercial real estate assets expected to remain stable to a little stronger during 2021”. However, Egypt’s housing market remains depressed, with the nationwide real estate index falling by 14.38 percent during 2020, far worse than the 2.28 percent decline observed in the previous year. Part of the explanation is possibly the very high interest rates available on deposits in Egyptian Pounds. Real house prices (i.e., prices adjusted for inflation) fell by 0.95 percent during the latest quarter.

South Africa

South Africa’s housing market has been more or less steady, amidst a depressed macroeconomic environment. The price index for medium-sized apartments rose by a minute 0.4 percent during 2020, an improvement from the previous year’s 0.9 percent fall. On a quarterly basis, house prices were almost unchanged. The economy contracted by a huge 8 percent last year, following sluggish growth of 0.2 percent in 2019, 0.8 percent in 2018, 1.7 percent in 2017, and 0.4 percent in 2016.

The survey also highlighted that, “Real house prices (i.e., prices adjusted for inflation) rose in 40 out of the 53 world’s housing markets which have so far published housing statistics. The more upbeat nominal figures, more familiar to the public, showed house price rises in 45 countries, and declines in only 8 countries”. There is no cause for alarm since there is positive response for Africa’s Housing Market.

 

Source: Abdul-Razak Mohammed (Real Estate Times Africa )

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