Constructing a Real Estate Price Index: The Moroccan Experience

The real estate sector became a centre of attention over the last few years, given the extent of its effects on financial and real spheres and its implications for monetary policy decisions and financial stability.

In the absence of reliable indicators for the Moroccan properties prices, The Central Bank of Morocco and the Land Registry Office began in 2010 a long process of constructing a quarterly real estate price index (REPI) based on the Office's Databases, which contain detailed information on all property transactions registered at the national level.

This first experience at the national level represents one of the pioneering attempts for the African continent. It aims to improve the transparency and well functioning of the property market, to refine the analysis of inflationary risks and to monitor real estate risk in the banking system.

In order to limit the effect of the above-mentioned constraints and depending on the nature and richness of the databases, several approaches for developing real estate price index used at the international level are presented and discussed in the first part of this document. The second part describes the available data at national level as well as tests and treatments applied, while the third part focuses on the methodological approach adopted for the construction of the index. Finally, the results of the national index are presented and analyzed in the last part.

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