Morocco's construction costs jump 25-30% as developers warn on affordable supply
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Materials prices have risen by between 25% and 30% and subcontracting costs for social housing have climbed sharply, squeezing Moroccan developers who say weak household purchasing power prevents them passing the increase on.
Morocco's real estate development sector is facing a sharp increase in input and production costs driven by energy prices, wages and administrative procedures, industry professionals told Hespress, with households' limited purchasing power constraining developers' ability to pass the increase on to buyers.
A senior source within the National Federation of Real Estate Developers said prices of construction materials including sand, steel, cement, concrete, glass, marble and bricks have risen by between 25% and 30%. Part of the increase is attributed to higher energy costs, with diesel prices exceeding MAD 16 per litre and approaching MAD 17, affecting transport and the operation of construction machinery.
Industry data cited by the source show that subcontracting costs for social housing projects have risen from MAD 2,400-2,500 per square metre to between MAD 3,000 and MAD 3,200. Developers are also struggling to recruit and retain workers as employees seek higher wages amid the rising cost of living.
Administrative delays are adding to the pressure. Obtaining permits and completing procedures can take between one year and 18 months, delaying project launches and exposing developers to further price fluctuation. The source said production costs have made it increasingly difficult to offer apartments at MAD 300,000 once land acquisition, materials, bank interest and administrative expenses are counted.
The source also cautioned against reading rising cement consumption as evidence of a housing market recovery, arguing that the increase is primarily linked to major infrastructure projects and non-residential construction. To encourage investment in rental housing, he called for simpler administrative procedures, faster court rulings in eviction disputes and tax incentives for owners of rental properties, including exemptions for rental income below MAD 1,500 or MAD 2,000.
Delivering affordable housing priced between MAD 300,000 and MAD 350,000 under current conditions would require government intervention through tax exemptions for developers, the source said, adding that the industry is willing to work with the newly formed government and submit proposals provided authorities open a channel for dialogue.