Interview with Anice Benjelloun, vice-president of the National Federation of Real Estate Developers
Main interlocutor of the real estate inter-branch, the National Federation of Real Estate Developers has not ceased since its creation in 2006 to campaign to clean up the real estate sector and enhance its attractiveness. However, the market remains fragile to exogenous factors, which is causing it to sink into deep sluggishness. The health crisis combined with the soaring prices of raw materials that the world is currently experiencing have further weakened this dynamic. Faced with this uncertain situation, private developers are sounding the alarm and urging the authorities to take bold measures to limit damage and breathe new life into this strategic sector of the national economy.
ALM : How is real estate activity currently?
Anice Benjelloun : We believe that the current situation is extremely difficult. Of course, the prices of hydrocarbons are increasing and dragging other prices down in their wake. We have noticed a certain lull in the rebar. This is explained by the phenomenon of Eid El Fitr and also Eid Al Adha which is coming up, but apart from that we have no visibility, especially with regard to social housing. At this level the prices are blocked on the rise. We are obliged to sell at 250,000 dirhams as the conventions indicate and with this price increase, the problem becomes serious.
Is the soaring price of raw materials currently impacting housing starts at the national level?
Indeed, we are seeing a decline in building permits. The filing of the building permit file has fallen by 30 to 40% on average throughout the territory. This figure is very alarming. This will not only have repercussions on the construction sector but also on the entire industry around it (tiles, cement, iron, sanitary, etc.). The situation is really difficult.
The supervisory authority plans to launch new housing programs. Is this decision wise given the current situation?
We believe that setting up new programs should not be topical these days. The urgency is to react to the increases and to propose alternatives that can relieve the sector, allow people to continue building and therefore ensure the sustainability of real estate activity. Talking regarding new programs at the present time is in our view not judicious. This is not the moment. We cannot in times of uncertainty, crisis and inflation set up any program. We believe that there is reason to save what there is to save, if only for social housing.
What does the FNPI recommend in this regard?
The federation has requested a two-year extension of the deadlines for the social housing agreements that have been signed. Unfortunately the government did not react. We should still give a sign to these promoters who are involved in this program. We are expecting! You should know that when this price increase accelerates it does not only affect building materials. It is a general increase in prices, so the purchasing power of the citizen, which is already weak, is reduced more and more. For this purpose, the potential customer no longer has the priority to buy. We would have liked the government as a whole to be able to decide and take measures to save the sector because we discussed with the supervisory authorities and developed strategies, but unfortunately we saw nothing coming.
What, in your opinion, are the priority measures to be taken for an effective revival of the sector?
First, I would mention the renewal of the social housing program for two years as well as the reduction of land registration and retention rates significantly to encourage people to buy. We must also try to make agreements with the banks so that they reduce interest rates which are quite high and which are now rising once more. It is also necessary to establish arrangements at the urban level to allow greater vertical extension in order to reduce the cost. These are partly the measures that the guardianship will have to take into consideration at the present time.
Can we have an idea of the stocks available on the market?
Unfortunately no. Today we have rough data but not reliable and precise data. We have, moreover, asked the supervisory ministry to set up an observatory to produce this kind of statistics. This will allow us to orient our projects according to requests.
One last word to close…
Although they are in the field, the promoters provide advice and guidance but cannot apply it. There is a governmental and legislative code which somewhat structures the sector. We hope that the government will react to this fluctuating and unclear situation. It is convincing to try to take measures to maintain the activity in this period of important fluctuation and crisis.
