"Apartments will increase in price by 8.6% this year" - Walla! Of money

2021-06-20T13:46:52.206Z

In the last week, for the first time since the beginning of the corona, the full picture of the severity of the situation in the construction and infrastructure industry is revealed. Raul Srugo: "We are on an abyss, just before a socio-economic crisis"

Of money
Real estate

"Apartments will rise in price by 8.6% this year"

"The housing market is on fire and is on the brink. The new government has the power to save us from a socio-economic crisis. The construction

The future is already here

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Raul Srugo - President of the Builders of the Land Association of Contractors (Photo: Kfir Sivan)

The absence of private landowners has led to a jump in price

The association's CEO Amnon Merhav

presented a series of data-based data on the housing market and the construction industry and revealed for the first time that in the last six years, the share of private land sellers in Israel has dropped from only 40% to only 15% of all land. Merhav said: "The difficulty in the volume of land sold in the economy in general and the almost smooth absence of private landowners from it, led to a jump in the prices that developers paid for the land."

Amnon Merhav, CEO of the Builders of the Country Association of Contractors (Photo: PR)

"The state is selling almost exclusively land for construction"

The

association's president, Eli Avisror

, said: "The shortage of land available for construction has become a scourge and the result is immediate. The declines we see in the sale of private land and the willingness of developers to pay huge sums on land indicate developers and contractors' continued price increases ".

"We have a big warning sign in front of our eyes. The state has become the seller of land for construction almost alone, for the first time in decades. This government has been given an option to raise the industry and the economy in a new way."

The shortage of workers has increased, the wait for the apartment is getting longer

The association's director general, Amnon Merhav, added: "The big picture is of a declining shortage of wet work workers for years.

These are jobs that Israelis are not willing to perform.

Lack of workers is a major barrier we have been warning about for years and is leading to an extension of construction time and this year reached a new high of 31.5 months on average. "

Srugo said:" We need an additional 30,000 foreign workers in the construction industry, which will shorten the average construction time 12,000 housing units each year. "

"Lack of long-term planning and construction"

The association's vice president, Haim Feiglin: "The association was the first to warn of the lack of long-term thinking of construction planning in Israel, already about five years ago. We have been pointing to irrationality for years. The state talks about population doubling by 2050 but acts as if it will never come ".

"The incoming government should open a new page in the field of planning and immediately present a multi-year descriptive planning process and set a goal of accelerating construction starts to reach 100,000 apartments per year within a few years. The planning should include two huge metropolitan areas in the north and south for 1.5-2.5 million inhabitants and immediate thickening "In existing cities, this includes allowing the conversion of futuristic plans into employment areas in favor of increasing the supply of residential apartments, rethinking high-rise construction and planning mixed-use towers. There will be no other way to deal with the future in a country with a growth rate like ours in Israel."

"The Chinese will cause 7,600 Israeli unemployed in the industry"

"In the field of infrastructure," says

the association's vice president, Zvika David

, "there is an opportunity for a real leap forward. In the Corona period, investment in infrastructure was a key to preventing the economy from deteriorating into a much more serious crisis. "One billion shekels will contribute to a 4% increase in investment in GDP by 2023 and will bring us very close to the level accepted in OECD countries."

David even referred to the process of Chinese construction companies taking over the industry. "This is a sick state-sponsored evil. There is a huge industry here that supports hundreds of thousands of Israelis and we are again warning of the economic and security risks of foreign companies owned by the Chinese government entering our industry. Companies whose feet have been excluded from almost every country in the West. "China is accused by the US president of undermining security wherever it builds."

"NIS 50 billion for the Chinese, instead of in Israeli hands"

According to David, "The danger of the potential for Chinese / foreign companies to win in the years 2021-2029 from plans approved and budgeted alone is no less than NIS 50.3 billion. Every shekel in them could go into Israeli hands paying taxes and contributing to the economy. If there is no change by 2029 "7,600 Israeli workers have their jobs for the Chinese. We demand that the government investigate in depth the expected impact of their entry into work here and are confident that the conclusions will allow a change in perception that will protect Israeli contractors."

An increase of almost 9% in apartment prices this year

Eyal Yanai, Co-CEO of the business information company Coface Bdi

: “The survey of contractors we conducted shows that the corona year did indeed cause significant damage to the construction industry.

Along with the decline in profitability, however, the capital structure of the companies in the industry remained stable, as did the morale of payments in the industry. "

Yanai added and shared from the survey:" Against the background of the corona crisis, the number of construction companies in Israel continued to decline. 133 construction companies deducted from the industry this year.

In light of this, most contractors expect an increase in activity and a significant increase in prices this year as well, which according to the survey will reach an increase of 8.6% on average, the highest in the last seven years. "

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Source: walla

All business articles on 2021-06-20