2023-08-09 11:00:09
Control of inflation and stability of monetary policy, determining factors according to Afdal
According to Afdal, the progress of Bank Al-Maghrib in controlling inflation as well as the prolonged stability of monetary policy would stimulate demand and de facto create new hope for the real estate market.
Mortgage rates remain stable from month to month. This is what Afdal.ma, an online mortgage comparator, finds in its barometer for the month of July. Thus, interest rates in July for loans of less than 250,000 DH stood at 4.20% over 7 years, 4.50% over 15 years and 4.75% over 25 years and more. For loans between 500,000 and 800,000 DH, the rates were 4.50% over 15 years and 4.75% for longer periods. Although rates for larger amounts have remained stable since June, these figures could change depending on market conditions. In terms of prospects, Afdal believes that Bank Al-Maghrib’s progress in controlling inflation could bring new hope to the real estate market. “Bank Al-Maghrib’s fight against inflation seems to be bearing fruit, and this is good news for real estate project promoters. Consumer price inflation, which was 10.1% in February, fell to 5.5% in June year-on-year.
This drop could encourage the Central Bank to maintain its pause in monetary tightening, after having increased the key rate by 150 basis points last year. And to continue that “with inflation deflating, the prospect of stabilized interest rates could give new hope to the real estate market”. Afdal also stresses that the slowdown in inflation is of paramount importance for players in the real estate sector, in particular borrowers.
“The inflation trend plays a crucial role in the Central Bank’s monetary policy decisions, which directly influence the interest rates offered by financial institutions,” we learn. And to recall that “Moroccans favor fixed rate loans, which transfers the risk of inflation to the banks”. Overall, the recent slowdown in inflation, according to Afdal, is a good sign for the future, as it mitigates the risks associated with long-term lending. “As inflation nears normal, banks may be more aggressive in their quest to attract demand,” Afdal said.
Afdal also notes that real estate project promoters will have to provide more equity this year than the previous year. On average, the personal contribution currently represents 22% of the acquisition price, compared to 15% in 2022. This increase could require some adaptation by future buyers.
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