© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
October 19, 2012 6:59 pm
Pungent spices in a Berber market, burning daytime heat up to 44C and a call to prayer five times daily combine to make Marrakech in Morocco more exotic and exciting than most other holiday home destinations within a short-haul radius of European capitals.
Yet even this fashionable north African city has not proved strong enough to escape the economic downturn. As a result its international property market – soaring five years ago – is today in the doldrums.
Transactions of homes valued above €1m now run at under half the peak levels of 2007 and supply is far ahead of demand despite a slight pick-up recently. “In 2011, things were very, very slow. Very few wanted to buy. This year it is a little better – just a little,” says Philip Arnott of Moroccan Properties Immobilier, an associate of Savills.
The prices of riads – restored ornate three-storey homes up to 500 years old, built around central open courtyards in the city’s medina, or old town – are down 25 per cent in 2007 and range from £700,000 to £2.5m. Prices of modern Moorish-style villas, usually with contemporary interiors, are down 20 per cent and range from £1m to, exceptionally, £15m for those with extensive grounds and security.
“In the medina it’s mostly foreigners who invest in traditional riads but Moroccan investors have started to show interest,” says Mathilde Lemoalle of the Moroccan office of property consultancy CBRE.
The wealthiest buyers, mostly British and French in recent years, look to more modern suburbs such as Guéliz, a European-style quarter created by the French 100 years ago, and Palmeraie, a vast palm grove on the outskirts of the city that has become an exclusive residential enclave in recent decades. Some foreigners buy old villas to modernise and extend, but many now choose contemporary private residences built by premier hotel brands.
Around Marrakech, there are stark reminders of the downturn: abandoned lower-cost residential developments, part-built and awaiting investment. But despite such eyesores, Marrakech remains a city on the move. Scores of cranes work on six five-star hotels due for completion in 2013; four golf courses are under construction, adding to the eight already operating; new roads are being built too.
Residents talk proudly of a newly-built railway station and the recently expanded Menara airport, a short drive from the medina. There is also a new motorway, just completed, from the city to the Atlantic port of Agadir, which can be reached in two hours.
This infrastructure work is part of a vision by King Mohammed VI to internationalise Morocco. In the early 2000s that vision included plans for six new coastal resorts for holiday homeowners, the promise of new infrastructure in regional cities, and even a 24-mile tunnel beneath the Strait of Gibraltar to link Tangiers with Punta Paloma in Spain.
The downturn has tempered those ambitions. Foreign holiday home buyers fell away, some international developers abandoned resort proposals and uncertainty surrounds the tunnel’s feasibility. Most improvements are, therefore, focused on Marrakech, which the king wants to make an upscale holiday home destination.
There are signs this approach is working. British Airways has recently instituted three flights a week from London to Marrakech, joining more frequent budget services from EasyJet. Lufthansa is shortly introducing direct services from Berlin and Düsseldorf, holding out the hope that hitherto low numbers of German holiday home buyers will rise.
Certainly any purchaser taking the plunge has plenty of choice nowadays. Riad Lia is a four-bedroom riad with roof terrace views of the medina. It has intricate ironwork and delicate mosaic tiling, was restored by a British owner four years ago and is now on sale for £1.22m through Moroccan Properties Immobilier.
One of the most dramatic properties on sale in the city is Dar Ambre, built in the 1990s as a vast family house but now operating as a 21-room hotel and private members club. It has faux-tent bedrooms, some with private pools, a large hammam and spa centre and two acres of manicured grounds. It is selling for £10.27m through Aylesford International.
For adventurous buyers some 25 per cent of the medina’s historic riads remain unmodernised but renovation projects on these buildings, once very popular, are not for the faint-hearted. Older riads may have no formal ownership deeds so require legally complex purchase processes, while Marrakech craftsmen charge top dollar for their restoration skills.
Tourist numbers, like holiday home buyers, are down due to the euro crisis and concerns over political stability after a bomb killed 15 people in Marrakech’s main square in early 2011.
“One problem with the Arab Spring is that people group together all Arab countries as having difficulties. In fact, Morocco is very democratic and very safe for investment,” says Alex Peto of Aylesford International.
Graham Norwood was a guest of Savills
● Distinctive and easily accessible
● Wide range of period and contemporary properties
● Snow-assured ski resort and beaches within a two-hour drive
● Medina lifestyle can be noisy
● Temperatures can reach 44C
● Properties can take months or years to sell
What you can buy for ...
£100,000 A small home in an unfinished estate on the city fringes
£1m A three-bedroom refurbished riad or modern villa
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.