Casablanca – A year after its launch, Morocco’s Direct Housing Support Program has garnered significant attention, with thousands of applicants eager to access financial assistance for homeownership. While the initiative has provided tangible economic benefits—such as increased real estate activity, higher cement sales, and growth in housing loans—it also faces significant challenges that could undermine its long-term success.

High demand but limited supply

Since its launch in January 2024, the program has received over 114,000 applications, signaling a high demand for affordable housing. The Ministry of National Territory Planning, Urbanism, Housing, and City Policy reports that 63,000 individuals have already received financial aid. Among these beneficiaries: • 25% are Moroccans residing abroad (MREs) • 32% are young people • 63% received $7,200, while 37% received $10,300

Despite this enthusiasm, the availability of eligible housing remains a major concern. The program’s requirements specify that only new housing units with an occupancy permit issued after January 1, 2023, qualify for assistance. However, real estate developers warn that production is not keeping up with demand, raising concerns about accessibility and affordability.

Economic impact and market imbalances

The program has had a noticeable economic impact, stimulating both the construction and banking sectors: • Cement sales have increased by 9.45% • Housing loans grew by 1.7% • Developer financing rose by 7.2%

Moreover, the program has expanded access to affordable housing beyond major urban centers, benefiting cities such as Fès, Settat, El Jadida, Benslimane, Oujda, Berkane, and Taza. However, experts question whether the surge in demand is matched by an adequate supply of new housing. Some fear that the program may be used to clear out older housing stock rather than drive the construction of new, high-quality units.

Key obstacles hindering the program

  1. Bureaucratic delays in construction permits One of the most significant challenges is slow administrative procedures, particularly in obtaining construction permits. Many projects remain stuck in bureaucratic limbo, delaying housing availability and affecting overall economic activity. Industry estimates suggest that permit delays cost the sector between $500 million and $1 billion annually.
  2. Rising land and construction costs Developers point to the increasing cost of land and building materials as a major hurdle. The prices of essential materials, such as steel, cement, and wood, have risen, further escalating construction costs and limiting developers’ ability to build affordable housing.
  3. market transparency and informal transactions Despite efforts to digitize the application process and improve market transparency, informal real estate transactions (“nawar”) continue to pose a challenge. Some buyers and sellers still engage in undocumented sales to avoid taxes, which distorts housing prices and reduces the program’s effectiveness.
  4. Uncertainty over eligible housing stock Both developers and financial institutions have raised concerns about a lack of clarity regarding eligible housing units. There is a need to ensure that subsidies are allocated exclusively to newly built homes, preventing funds from being used to offload older or unsold inventory.

The need for policy adjustments

To address these challenges and enhance the program’s impact, stakeholders are calling for urgent reforms, including: • Accelerating permit approvals to speed up housing production • Providing incentives for developers to build more affordable units • Strengthening market transparency by improving oversight and reducing informal transactions • Revising eligibility criteria to ensure financial aid supports new housing projects, rather than clearing out outdated inventory

While the Direct Housing Support Program has proven effective in increasing homeownership and driving economic activity, addressing these structural challenges is crucial for ensuring its sustainability. Without policy reforms and administrative improvements, Morocco risks a continued supply-demand imbalance, leaving thousands of prospective homeowners without suitable housing options.