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CPS1198 Firano Z. et al.

Hedonian Brownian motion index for Morocco
1
1,2
Firano Zakaria , Filali A. Fatine
1 University of Mohammed V Rabat
2 CIRPEC
1

Abstract
In this paper, we propose a new approach to modelling a real estate price
index in Morocco, based on the hedonic approach. The basic idea of this paper
is to verify the importance of the characteristics of real estate in the real estate
price. Thus, based on data from the three major cities of the capital region of
Morocco (RABAT Region), we estimated a hedonic model that takes into
account spatial autocorrelation. The results obtained through this modelling
generally confirm that the surface area and location of real estate (land, house,
villa and apartment) have a significant influence on the price of real estate. In
addition, and because of the static nature of the database, which refers to one
year, we have proposed a new approach to building the real estate price index,
namely the stochastic Brownian motion approach. The results claim that this
index is in perfect agreement with the real estate price index based on the
repeat sales approach used and developed by the Central Bank.

Keywords
Hedonic index; Brownian motion, real estate market.

JEL Classification
G12, E44

1. Introduction
In Morocco, two phases characterize the evolution of the real estate
market in Morocco. The first phase is the one before the 2000s, when real
estate prices were stagnating with real estate supply out of phase with the
needs of the population. From the 2000s and precisely during the year 2003,
the real estate sector benefited from several tax and regulatory advantages
that boosted the real estate market.
The method adopted in the property price index in Morocco is that of
repeat sales. The index based on this approach consists in selecting all the
properties that, during the period considered, gave rise to two or more
transactions. The difference in price of a building between its purchase and its
resale determines the growth of the price of this property during the period.

1 Centre Interdisciplinaire De Recherche En Performance Et Competitivite
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