Les crédits immobiliers en décélération

Decelerating real estate loans

At a time when interest rates are at their lowest level

The acquisition of real estate remains the main motivation for households to take out a loan. Evidenced by the proportion of mortgages in the overall structure of bank loans. Of the 980.65 billion dirhams of bank loans distributed over the first 4 months of the year, 293.07 billion were contracted in the form of real estate loans. This outstanding amount is consolidated by 6.62 billion dirhams compared to the same period last year. Despite this increase, the growth rate of mortgage loans slowed down in the fourth month of the year. The figures stopped by Bank Al-Maghrib showed at the end of April an increase of 2.3% of these loans against 2.6% previously.

Households, main beneficiaries
The data available at the end of April places households at the top of the customers in this segment. They alone capture an outstanding amount of around 241.45 billion dirhams. These loans show an improvement of 3.2%, consolidated by an additional outstanding amount of around 7.58 billion dirhams. Referring to the monetary statistics of Bank Al-Maghrib, housing loans amounted to 234.92 billion dirhams, an improvement of 7.3 billion dirhams, compared to the same period of the year, i.e. a up 3.2% year-on-year. Among the trends also noted, we cite the marked increase in loans allocated to real estate development. Their outstandings firmed up by 7.1% to reach 5.88 billion dirhams at the end of April. However, real estate loans granted to private non-financial corporations were down compared to the fourth month of the previous year. They thus lost 1.38 billion dirhams of their value. They stand at 50.26 billion dirhams, down 2.7%.

An average interest rate of around 4.10% excluding fixed tax
The latter continue to position themselves at their lowest level. The borrowing rates practiced to date are very competitive. They come at a time when borrowers are becoming better informed. They can thus more easily bring into play the competition, which pushes each bank to want to maintain the best offers on the market. To this end, interest rates are at their lowest level. This is what Afdal.ma notes in its latest barometer. The average rate in Morocco at the end of May was around 4.10% excluding fixed tax, for all durations combined. “Based on the 419 pre-agreements in principle distributed by Afdal.ma in May, property rates continue to decline, and have been reduced to 3.9% excluding fixed tax”, comments Afdal.ma in its analysis. And to add that “low rates have allowed many buyers to access the real estate market. The banks have therefore done everything to keep rates at this level, which can be explained by several factors: the central bank’s desire not to stifle growth, the need to compensate for the rise in property prices, stronger competition between banks, etc. In detail, mortgages for an amount of 80,000 to 1,500,000 dirhams fell by 0.10% at fixed rates. As for loans taken out at less than 800,000 dirhams, their rates have, according to Afdal.ma, decreased by 0.03% fixed excluding tax. “The only downside, even if the borrowing conditions are still very attractive: loans for an amount between 1,500,000 and 2,000,000 dirhams record a slight increase of 0.10% in fixed rate excluding tax” , we note in this regard. With regard to death and disability insurance rates, they stagnated at an average of 0.40% in May, bringing out the overall effective annual rate at an average of 4.91% fixed.

Increased competition between lending institutions
At the dawn of the summer period, market experts observe strong competition between lending institutions. This trend partly explains the drop in rates observed. For Afdal, this drop is often accompanied by promotional offers. The goal is to encourage first-time buyers to acquire a property even with a limited personal contribution. In May 2022, 414 pre-agreements, out of the 419 generated, indicate a loan duration of less than 15 years. The overall average is 19 years old. “A reduction which could be a direct consequence of the increase in borrowing capacity following the fall in rates”, can we retain from the said barometer. To counter this reduction, Afdal.ma indicates that it is important to assume a general sagging of the financing quota of the credits granted. The LTV fell by 37.90% for housing loans of more than 3,000,000 dirhams. In general, the fall in the LTV is recorded at 2.77% between May and April of the year 2022.

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