If the first act in the Middle East’s property market has played out in the Gulf, North Africa is where the spotlight is moving for Act Two.But, as the plot thickens, big questions remain: far from the Gulf, the countries of the Maghreb – that swathe of Africa north of the Sahara and west of Egypt – are a diverse collection of markets, each with its own complicated population and policy dynamics.

Quick country summaries:

Although regularly lumped together, the countries of the Maghreb are a mixed bag, especially when it comes to property development. Morocco, an increasingly popular tourist destination for Europeans, has a reasonably well developed infrastructure....Algeria has a population of about the same size, 34 million, but its economy is recovering from a long-running Islamist insurrection in the 1990s. Libya is just emerging from decades of isolation and getting its first taste of economic development. And Tunisia has a smaller population with a sizeable, educated middle class, 80 per cent of whom are property owners.

Big project players?:

It is far from clear how the Middle East’s new property giants – such as Emaar, Sorouh and Tameer Holdings, who have cut their teeth in friendly home markets – will fare as they launch some of their first and most ambitious overseas projects in the nations along the southern shore of the Mediterranean Sea.

Problem?

[T]he UAE model – of obtaining land at minimal cost and selling properties off-plan to fund the building of projects – does not work there and some developers have found it difficult to kickstart their projects. In July 2006, when Emaar announced a number of other projects – including the redevelopment of Algiers Bay – the value it cited of up to $25bn caused quite a stir, as did the models of vast coastal developments that the developer displayed. . . However, little more has been heard of the Algiers Bay project. Two months ago, the Algerian minister of industry and investment, Hamid Temmar, confirmed that Emaar had invested in three other projects, with a total value of $5bn.

Opportunity?

The property sector has attracted half of all GCC investments in Morocco, the country most open to property investment from foreigners. Development here is targeting tourism and upmarket housing for expatriates and the local elite, rather than meeting affordable housing needs.

The usual problem continues?

“Investing in Rabat’s economic development as a capital makes sense and the amount [or investment] is manageable,” said a European diplomat in the capital, expressing doubts about the viability of other parts of the country, particularly the overheated Marrakech market. . . Comparing Morocco with elsewhere in the Maghreb, he wondered if many of those projects would ever be built, raising North Africa’s age-old spectre of corruption. “In my opinion, investing $10bn or so in a new city in Tunisia doesn’t make any sense,” he said. “It seems that the only realistic figure is the percentage of the $10bn that certain people in the local government may expect in commission.”