30 senior members of the real estate world in a comprehensive dialogue on the corona crisis, the return of investors and the prospect of falling prices

• "The main problem is that there are no lessons learned"

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  PR

Produced by the Department of Special Supplements

Confusion and uncertainty? Until we got used to the price per occupant and the "interested parties" of Finance Minister Moshe Kahlon, a new plan emerged - the six steps of Minister of Construction and Housing Yaakov Litzman.

The main points of the program: Encouraging construction in the periphery through grants and loans, price per occupant will continue in the periphery on a limited scale, grants of up to NIS 700,000 for the purchase of second-hand apartments in the periphery, reduction of purchase tax for investors, all-price tenders in expensive areas

As someone who always favors round tables, we decided to produce a comprehensive dialogue with the participation of industry executives to discuss key issues.

Is it already possible to eulogize the price-per-tenant plan?

Zeev Bielski, chairman of the outgoing housing headquarters: "Although the principles of Litzman's plan have been published, government approval will be required. "The price per occupant will continue with us for many more years, as so far about 80,000 young couples have won the right to an apartment at reduced prices, and they must be accompanied until the last tenant receives the key."

"For every shekel that the state has invested in the price per occupant, the public has earned 3 shekels. It is important to reassure all the happy winners - the state will continue to be committed to the tens of thousands of couples who have won and have not yet received a key."

Dafna Harlev, CEO and owner of Aviv Group: "The plan was not right, the benefit was not equal and allowed only a new apartment to be purchased in areas that are not always suitable. The plan did not provide a solution for housing developers."

Haim Mesilati, Chairman of the Bureau of Real Estate Appraisers: “The price-per-tenant program had many benefits in assisting young couples and disadvantaged populations. There were also quite a few failures, but it seems that the conclusions have been drawn over the years and some of the shortcomings have been corrected. It must not be forgotten that thanks to the program thousands of homeless families were able to buy an apartment and win a significant discount. There is justification for continuing the program in the periphery. "

Roni Mizrahi, President of the Chamber of Contractors and the owners of the Mizrahi Group & Sons: "There has been enormous damage to the housing market and the Israeli economy, and it is a pity that the program has not been stopped for a long time. It has cost many billions."

Roni Brick - Entrepreneur, Chairman of the Association of Contractors and Builders in the Sharon District, former president of the Bonni Haaretz Association: "Minister Moshe Kahlon fell in love with the price per occupant program and insisted on sticking to it even when he saw that it was not achieving its goals. The main problem of the construction industry is that there is no lesson learned from the past and no continuity that produces certainty. "

Ron Avidan, CEO of Azorim: “The program has exhausted itself. It has created unreasonable and unjustified gaps between those eligible in the central region and more distant circles. In the last year, the public has lost faith, and today more and more projects can be seen that are standing desolate. "

"Lowering the purchase tax is a positive step but not enough" // Photo: PR  

Mati Dov, CEO of the Harit Residential Fund, which specializes in long-term leases: “The program has not achieved its goal. Apartments were built in areas where there is no high demand, so many apartments remained empty. At the same time, there is a shortage in areas of demand. The rise in apartment prices has not been curbed. "

Haim Karadi, CEO of the Praszkowski Company: "The completion of a price-per-tenant program in its current format would have been desirable, because it caused gaps between the center and the periphery. Eligible people in the central region earned NIS 800,000, while in the periphery only about NIS 100,000. "

Nehama Bogin, a real estate appraiser and lawyer: "This plan was a farce from the beginning and did a lot of damage to the market. It hurt construction starts and turned an entire generation of young people into reluctant investors. Other solutions for young couples will have to be found, such as greater long-term rental Grants for a first apartment. "

Will accelerated construction in the periphery provide a real solution to the housing market?

Liran Ovadia, Head of the Real Estate and Banking Products Division at the Bank of Jerusalem: "The forthcoming plan provides only a partial answer in relation to its predecessor, although we will have to wait for its publication in full. In my opinion, it is not enough to solve the housing crisis in Israel or significantly increase the supply of apartments. "

Efrat Segev, VP of Information and Research at Dun & Bradstreet: "The move to the periphery is not just about housing, but about a comprehensive solution: employment, transportation, education and health at a high level, things that are lacking today."

Yehuda wrote the chairman of the Contractors Association in the Tel Aviv and Central District, Vice President of the Builders of the Land Contractors Association: "Strengthening the periphery is a smart and right move, and the minister who produces geographical differentiation in benefits for the eligible does well. However, there is a significant chapter missing in the plan that addresses the issue of urban renewal. "Despite the decision to allocate supplementary land, the Israel Land Authority, which is part of the Ministry of Housing, does not allocate land for this, and thus promotes the promotion of projects."

Yitzhak Moyal, chairman of the Histadrut of Construction Workers and Associated Industries: "The actions that need to be taken today are indeed increasing construction in the periphery and providing grants to young couples and anyone who does not own an apartment and cannot afford it."

Shlomo Grofman, chairman of the Pierre Foundation: "Please try to help young couples buy a first apartment, but I fear that as in the case of a price per occupant, the fact that the significant grant will be given mainly to those who choose to buy an apartment in the periphery will hurt construction starts. The apartment owners and contractors will embody the discount that those couples will receive at the asking price of the apartment. I do not expect a decline in apartment prices in the coming years in areas of demand. " 

Avi Rosen, CEO of Neve Gad: "The state should not subsidize land in areas of demand. The government must understand that without infrastructure care - transportation, employment and education, young couples will continue to live in the center. "

"It is important to promote housing and infrastructure projects, // Photo: PR  

Dror Toren, CEO of America Israel Residential: "Focus on the periphery is required. When land is released in the center for as much as possible, there is a high probability that prices will rise significantly, and of course this will later lead to an increase in prices in the periphery. "

Arnon Friedman, CEO of Ashdar: "I am not convinced that a high subsidy for buying an apartment will cause the public to move to the periphery. In the absence of a subsidy in the center of the country, the homeless will find it very difficult to get to their own apartment. "

Gilad Yifrach, CEO of Gilad Mai: "As an entrepreneur who is active mainly in the far periphery, I think the government has a commitment to help entrepreneurs and contractors continue to promote and build projects in remote areas. These are areas where the risks are higher and profit margins are lower. The risk increases even more in times of crisis. "

Rebel Shabbat CEO of ICR Israel Canada and Ram Residential (formerly Manrav Projects): “The main rationale is to help the underprivileged populations. If no real value is created for the periphery, the plan will be like a stone that has no opposite. "All government arms must be activated at the same time, in order to receive an orderly long-term plan of five years ahead."

Daphne Harlev: "Assistance in the periphery needs to be more significant, and for this purpose employment must be developed."

Nir concludes: "Marketing land for the highest price in the central areas means a return to the land speculation method. The distinction between center and periphery may primarily harm the public living in peripheral cities and create an unacceptable gap compared to apartment prices in the center Negative on the periphery. "

When will investors return to the market?

Asi Levitin Ben Amram, VP of Business Development at Dan Real Estate: "Lowering the purchase tax will encourage small investors and help drive the housing market. However, the most interesting issue in the Arrangements Law is in my opinion the possibility of incorporating 30% housing in income-producing projects. "In real time and not in retrospect. The move can encourage companies and investors and launch new projects in the field of income."

Yaki Briga, owner of Briga, a company that specializes in luxury housing: Lowering the purchase tax is a positive but not enough step. This must be combined with reducing processes from the moment the project is planned until the delivery of the finished product, as a key to lowering housing prices in the country. "

Nir Shmol, owner of Snir, a company that specializes in real estate marketing: "The market will move again for the benefit of investors, who want to help their children and purchase a future property for them as part of the inheritance process while they are alive. Thousands more apartments will enter the market and rental prices will fall. "

Shlomo Grofman: "In my opinion, the biggest impact of investors' return seems to be in the luxury apartment market, which has suffered a significant blow from the purchase tax increase. The impact will not be immediate, due to the corona crisis, whose effects we will continue to see at least next year."

Roni Mizrahi: "This is definitely a step in the right direction, but not satisfactory. The purchase tax should be reduced to 2.5% to start the housing market. The regulation that the investor must bring 50% financing for an apartment from home must be immediately repealed. This prevented many hundreds of transactions." .

Ron Avidan: "Returning investors to the market by lowering the tax will lead to an increase in the number of transactions and will give the state significant income that it so desperately needs at the moment. Young couples will also benefit from the move, as it will bring many apartments to the rental market and increase supply significantly."

Rebel Shabbat: "I envy other economies where there is no purchase tax. Because of the fear of earning a living, young couples will be less inclined to make deals in the near future. Investors should now be encouraged to channel money into the real estate market and the real economy." The economy. If I were finance minister, I would lower the purchase tax even further, raise the capital gains tax and dissolve the sale process of the second-hand market. "

Dror Toren: "The recent crisis has taught investors that stock exchanges and other monetary investment channels are speculative and not suitable for every investor. In contrast, investing in real estate is considered safer and more tangible."

Dafna Harlev: "Young people need apartments for rent, therefore the supply should be encouraged by adding building rights without an improvement levy on construction for rent. A reduction in purchase tax is required in order to encourage the purchase."

Marcello Incelini, CEO and owner of Franchi Real Estate, which specializes in representing foreign residents and new immigrants: "It should be understood that foreign investors are part of a circle that includes entire families, parents and children, as well as neighbors and friends. Their desire is to preserve The community framework and continue to live in close proximity to each other, even if it is several apartments in the same building or the same project. "

How will the corona crisis affect the housing market?

Dr. Bernard Raskin, CEO of RE / MAX: "I anticipate a slowdown in construction starts due to economic uncertainty. I do not anticipate an improvement in supply but a deterioration of the situation."

Zeev Bielski: "The economy is in turmoil due to the corona. It is very important to continue to define the housing and real estate market as vital and to promote as many housing and infrastructure projects as possible. The planning and licensing institutions at the national and local level are required to continue to operate in high gear. "

Arnon Friedman: "During the months of closure, there was a significant decrease in the sale of apartments and the start of construction. The demand for apartments did not decrease, on the contrary. The return of many Israelis and the increase in world Jews is expected to increase the country's population and demand for apartments."

Nissim Bariach, co-CEO of Neve Ha'ir: "On the part of the developers, there is definitely unrest. It is too early to say what the damage of the plague will be. "

Haim Mesilati: "The Corona crisis has not shaken the real estate market. The market remains stable and we also see a rise in prices, albeit a minor one, but it can illustrate that the market is active. "

Shabbat rebels: "People still do not understand the intensity of the crisis. It is both a real and financial crisis, and within six months we will feel it. The various sectors must inject money so that the locomotive does not stop. The employment stability of young couples has been damaged, their ability to buy apartments has been damaged. to them".

Ron Avidan: There is an indirect harm to young couples due to a significant delay in issuing tenders and registration and bureaucratic processes. Even so, we entered a crisis with a low supply of apartments, and the crisis only deepens the shortage. There will be fewer apartments, fewer opportunities and in the end young couples will feel it in their pockets - both in apartment prices and rental prices. "

Yaki Briga: "We hope that the corona crisis will pass soon. In any case, a crisis of two or three years does not affect the housing market, which has been working in longer waves of at least a decade. The Israeli economy will return to us and high prices."

Nir concludes: "The National Housing Headquarters operated extensively during the crisis: we enabled the activities of the planning institutions through zoom meetings, a price-per-tenant program continued to operate under the restrictions of the Ministry of Health. I maintained direct contact with the Bank of Israel and bank managements." The winners will continue as usual. "

Vered Tzarfati Zevulun, Vice President of French Shimon: "The Minister of Finance would do well to act to reduce the purchase tax for investors. As a result of investors leaving the market, the supply of apartments for rent decreased and rental prices rose accordingly. I believe that this step will contribute to restraining rental prices and help increase the volume of activity in the real estate industry, which is one of the significant growth engines. "

Liran Ovadia: "The corona crisis has created uncertainty and circumstances that we did not know before. The significant increase in unemployment along with many workers in the Knesset may to some extent affect the demand for the purchase of apartments. On the other hand, stopping the marketing of the land as part of a price-per-tenant program and waiting for the resumption of land marketing according to the new housing policy that is emerging, are expected to produce fewer apartments for marketing in the next two to three years.

"Based on the current activity we see in the field of mortgages and the sale of new apartments in construction projects, it is clear that the activity has returned to routine data but the conditions of uncertainty still exist and it is too early to predict the future."

Are prices expected to fall?

Haim Mesilati: "It seems that the stability trend will accompany us later in the year. I allow myself to say that we may see an increase in prices. The same goes for rental prices, which may climb by 5 to 10% in the coming year."

Bernard Raskin: "I expect a single-digit rise in buying and selling prices and a single-digit and even double-digit rise in some areas in rental prices. Today we are paying the price for the policies of recent years that have kept investors away."

Dafna Harlev: "During the year, I do not expect an increase in prices. It is very important to encourage construction starts, so that there will be no shortage of apartments in the future."

Avi Rosen: "Apartment prices are not expected to fall, as there is a decline in construction starts and new projects underway and supply is dwindling. Rental prices will also remain stable. People need a roof and demand has not disappeared."

Itzik Moyal: "Prices will continue to rise as long as the government does not take the necessary steps and there is a shortage of apartments versus demand. The shortage of apartments is so great that the decline in demand as a result of the crisis is not enough to lower prices."

Roni Mizrahi: "Housing prices are expected to be fueled upwards, especially in the center. I unfortunately do not see a situation in which rents will fall. In my estimation, it will jump even higher in the next year or two, especially in areas of demand."

Rebel Shabbat: "The prophecy has been given to fools, but I am optimistic. I feel there is sales, but also ambivalent to what is expected in the coming year. I think that within the real estate sector the one who will be least affected is the housing world. It will have a revival, investors will return. People will always need a roof over their heads. "

Ron Avidan: At the moment, it seems that as long as the Corona is with us, housing prices will remain stable. Most entrepreneurs are selling at a good pace, but they are aware of the public's economic hardship and understand that this is not the time to raise prices. If you look a little further, the fact that there is a deep supply problem and at the same time the interest rate environment remains low, may lead to an increase in prices. "

Haim Karadi: "I believe that there will be an increase in apartment prices, especially in the central area, where the stock of land is running out. The rental market will also experience price increases, since there is no comprehensive solution in this market."

Arnon Friedman: "If the economic situation does not improve in the coming year, the pace of sales will be slow and on the other hand there will be a decline in construction starts. When the economic situation recovers, the occupied demand for apartments erupts, the supply of available apartments will be low.

Nissim Briach: "In my opinion, if the situation remains the same in the second half of 2020, apartment prices will rise as the pace of land marketing has slowed over the past year and a half and housing inventory will shrink accordingly. However, rental prices will remain stable due to uncertainty and desire to buy apartments."

Do you have a tip for promoting the construction industry?

Eyal Handler, Chairman of the Canaan Group, which specializes in the field of urban renewal: "From the beginning of his tenure, Litzman should place emphasis on the massive promotion of urban renewal programs, especially evacuation-construction complexes."

Roni Cohen, CEO of Eldar Marketing: "An eligibility plan must be formulated that does not depend on the lottery, and those eligible for state-guaranteed loans must be granted in the order of 30-40% of the value of the property. We need to release as much land as quickly as possible in areas of demand. "

Haim Karadi: "To shorten the bureaucracy. From the moment you decide to promote a plan until the building is built, sometimes 20 years pass."

Shlomo Grofman: "First, lowering the percentage of taxation on the housing market, which currently reaches about 60% of the value of the apartment. Second, removing barriers to the planning and marketing of land."

Mati Dov: "Once the state encourages construction for rent, it will increase construction starts and the supply of apartments. People will be able to live in places that suit their needs, and at the same time curb the rise in prices."

Roni Mizrahi: "I would immediately increase the building rights for contractors by 30% in all new projects in the demand areas in the center of the country and oblige them to market 30% of the apartments at discounted prices. It will be a win-win situation."

Ron Avidan: "The length of time it takes to implement complexes of urban renewal ranges from 5 to 10 years. If they address the bureaucratic barriers that exist in the field today, it will be possible to solve the problem of the supply of apartments in the State of Israel."

Avi Rosen: It takes a long time for city building plans to be approved. The process of issuing building permits is also very long. The more they deal with the barriers of bureaucracy on the one hand and the addition of manpower to the construction industry on the other, the more the housing market will be able to meet the challenges it faces. "

Nir Shmol: "Public housing in every building will be a condition for obtaining a building permit and increasing the number of housing units in every new building. The social benefit from the meeting between the strong population and the population in need of public housing will be real integration."

Haim Mesilati: "Many projects are delayed due to a dispute between the developer and the authority over the amount of the improvement levy. I would suggest that Litzman allow developers to pay the undisputed amount in the first stage, so that the developer can obtain a building permit, continue litigation with the authority over the amount "Of the decisive appraiser. This will prevent a situation where projects get stuck for long periods."

Arnon Friedman: "The housing market will continue to suffer from a gap between low supply and high demand in the center of the country. When the government is educated to encourage urban renewal in areas of demand by providing incentives to local authorities, supply can be increased where it is most important."

Liron Perry, CEO of Peri Real Estate: "If the firm succeeds in producing certainty in the market and cooperation with the contractors, they will build and increase the supply of apartments. Regulatory activity that will hurt developers, impose decrees and reduce their profits will reduce construction starts "Minister Litzman, cooperate in contrast to your predecessor with the developers and contractors, and they will build the apartments that the economy needs."

Produced by the Department of Special Supplements