Samya Beidas-Strom, Weicheng Lian, and Ashwaq Maseeh
This paper examines housing finance and housing price dynamics in selected emerging Middle Eastern economies over the past two decades. It finds that (i) mortgage markets have experienced rapid development, which has led to lower private per capita consumer spending volatility this decade; (ii) a downward price correction occurred in the housing market after 2007, which appears to have bottomed out; (iii) the rental market appears to be largely determined by region-specific economic fundamentals-a youthful working-age population and wealth variables; and (iv) a segregation between self-owned house and rental price dynamics exists in this region, rendering the former more sensitive to the business cycle.
The macroeconomic environment is sound, with low inflation and a comfortable external position, although the fiscal position remains a concern for the medium term. The authorities have successfully privatized and liberalized the telecommunications, energy, and transportation sectors. Moreover, Morocco has significantly liberalized its trade regime and strengthened its financial sector. These reforms have enhanced the overall productivity of the economy and heightened its resilience to shocks. The medium-term outlook is favorable. The government debt-to-GDP ratio has declined steadily since the turn of the century.