African property boom drying up

Morocco has seen a property market boom over the last few years fuelling its national economy and stock markets. Only last week, the Moroccan stock exchange had to suspend the shares of property firm Addoha, following an uncontrolled drop in its value. Despite what sounded a really encouraging result - net profits had increased by 40% - the market was deeply disappointed by the company's result.
Moroccan property development is doubly hit by the global financial crisis. First, foreign investments in this capital intensive sector are drying up as cash becomes harder to get on global markets. Second, the typical buyers of Moroccan property are Europeans looking for a holiday home in the pleasant North African climate, but these are now insecure about their personal economy and also have less access to credits. Analysts therefore fear that foreign property buyers will postpone their decision to buy.
The American and European middle class, according to market research, already plans to make fewer short holiday trips, while hoping to be able to afford one long summer vacation, looking for reasonable offers. For the American middle class public, this would in most cases rule out an Africa trip. For Europeans, sub-Saharan Africa and in particular the Indian Ocean may currently seem too luxuriously, already creating fears in the tourism industry in countries such as Tanzania and Mauritius.
However, North Africa may still be very competitive in the 2009 season. The region already has seen great market gains during the last years and may stay a winner among Europeans. Flights to North Africa remain relatively cheap and as holiday destinations, Tunisia, Morocco and Egypt are considered the cheapest places to stay, eat and drink well for European travellers.

via afrol News