Les crédits immobiliers en décélération

Mortgage loan slowdown

At a time when interest rates are at their lowest

Possession of real estate remains the main motivation for families to obtain a loan. Evidenced by the ratio of mortgages in the general structure of bank loans. Of the 980.65 billion dirhams of bank loans distributed over the first four months of the year, 293.07 billion were contracted in the form of real estate loans. This outstanding amount has been consolidated by 6.62 billion dirhams compared to the same period last year. Despite this increase, the rate of mortgage loan growth slowed in the fourth month of the year. Figures suspended by Bank Al-Maghrib at the end of April showed an increase in these loans by 2.3%, compared to 2.6% previously.

Families, the main beneficiaries
Data available at the end of April puts households at the forefront of customers in the sector. They alone hold an outstanding amount of about 241.45 billion dirhams. These loans show an improvement of 3.2% backed by an additional outstanding amount of approximately 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, an increase of 3.2% year on year. Among the trends also observed, we note the marked increase in loans dedicated to real estate development. Their external performance increased by 7.1 percent to 5.88 billion dirhams at the end of April. However, real estate loans granted to non-financial private companies decreased compared to the fourth month of the previous year. Thus, they lost 1.38 billion dirhams of its value. It amounted to 50.26 billion dirhams, down 2.7%.

Average interest rate of about 4.10% excluding fixed taxes
The latter continue to put themselves at their lowest level. The borrowing rates used to date are very competitive. They come at a time when borrowers are becoming better informed. Hence they can play the role of competition more easily, which leads every bank to want to keep the best offers in the market. To this end, interest rates are at their lowest. This is what Afdal.ma notes in its latest metric. The average rate in Morocco at the end of May was about 4.10% excluding fixed taxes, for all terms combined. “Based on 419 prior agreements distributed by Afdal.ma in May, real estate prices continued to decline, and were reduced to 3.9% excluding fixed taxes,” Afdal.ma comments in its analysis. To add that “low rates allowed many buyers access to the real estate market. So the banks did their best to keep interest rates at this level, which can be explained by several factors: the central bank’s desire not to dampen growth, the need to offset high real estate prices, competition Strong inter-banks, etc. In detail, mortgage loans ranging between 80,000 and 1,500 thousand dirhams decreased by 0.10 percent at fixed rates, and as for loans of less than 800 thousand dirhams, their rates decreased, according to Afdal.ma, by 0.03 % fixed excluding taxes. We note in this regard that “the only downside, even if the borrowing terms are still very attractive: loans in the amount between 1,500,000 and 2,000,000 dirhams, register a slight increase of 0.10% in the fixed rate excluding taxes.” Regarding insurance rates On death and disability, it held steady at an average of 0.40% in May, bringing the overall effective annual rate up by a flat average of 4.91%.

Increasing competition among lending institutions
At the dawn of the summer period, market experts note strong competition between lending institutions. This trend is partly explained by the observed decline in rates. For the best, this drop is often accompanied by promotions. The goal is to encourage first time buyers to own property even with a limited personal contribution. In May 2022, 414 of the 419 advance agreements reached indicate that the loan term is less than 15 years. The general average is 19 years. “A reduction that could be a direct result of an increase in borrowing capacity after lower interest rates,” we can hold from said metric. To counter this reduction, Afdal.ma points out that it is important to assume a general decline in the share of funding for credits granted. The maximum percentage of real estate loans decreased by 37.90% for housing loans of more than 3 million dirhams. Overall, the decline in LTV was recorded by 2.77% between May and April of the year 2022.

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