And if it's a real estate bubble at all? Experts: "The explosion will be in a few years ahead"

Once every few weeks the question arises again whether we are in a bubble.

There are those who think so, and there are those who cast the spotlight elsewhere: "The question is not the price, but the source from which the money comes."

So buy now or not?

We tried to reply

Walla!

Real Estate

07/12/2021

Tuesday, 07 December 2021, 09:02 Updated: 10:50

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"These days almost every apartment is sold at almost any price, apartment owners throw away a price, do an experimental balloon and see that it is good because the apartment is sold at the price they wanted"

Every few weeks the question arises whether we are in a real estate bubble. Prices keep rising, demand is high, no decline is in sight - and yet, some believe this demonic dance will stop.

One of them is architect Ron Spiegel. "I think it's a bubble and at some point It will explode, "says Spiegel," I do not think there will be an explosion like in the US in his time, but we will reach a dead end, where people are really unable to buy houses. And only then will everything explode. Today's price increase is meteoric, these days almost every apartment is sold at almost any price, apartment owners throw away a price, do an experimental balloon and see that it's good because the apartment is sold at the price they wanted. "Of all the apartment prices in the area. The biggest beneficiaries of the issue are, of course, the banks that increase mortgages and loans."

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To the full article

Buyers buy and buy.

Urban renewal project designed by Orbach Halevi Architects (Photo: Yachz)

"The solution: flooding the market with apartments"

"The government is taking reckless steps," Spiegel argues.

Ron Spiegel (Photo: Regev Kalaf)

Recently there has been a 6-9 percent increase in the cost of construction of residential buildings.

In construction, prices soared by about 30 percent.

The price increase will eventually come out of the customer's pocket, and in luxury homes it is reflected in the price of luxury finishing products, such as personal carpentry for the whole house, cladding from abroad and more. Still, it does not stop buyers, and Spiegel explains that the move is true. Says, "I think it's time to buy.

The explosion will not be soon but in a few years ahead.

"Aliyah in Israel is parallel to what is happening in the world and it is not going to change any time soon."

The government has recently taken a number of steps, including raising the purchase tax, to calm the housing market.

"The government is taking reckless steps," Spiegel claims. "In his mind, the future realization or the rent he will receive for his apartment, understands that a loss will probably not be here and therefore the increase is void in the sixties. The only thing that can solve the situation is flooding the market in apartments and of course, resolving bureaucracy and obtaining permits.

"It's time to buy. A building designed by architect Ron Spiegel (Photo: Yachz)

"Madness will stabilize soon"

Shirley Dan (Photo: Yehudit Hoffman Mager)

Shirley Dan, who owns an architecture and interior design studio, thinks otherwise: "I do not think we are in a bubble. The madness will soon set in, and I believe the real estate market, which incorporates both the regular homes and apartments market and the luxury market, will always be on the rise. These days I see a very serious demand, I believe it is because of the priorities that people set today - fewer passengers, less flying and the house has taken on a different meaning. That's why they invest more in it. People today also work from home and are in it for much of the week, so homes have become hybrids. They want their home to be more and more luxurious and suitable for the needs. "

Engineer Dafna Biran, managing partner at Orbach-Halevi Architects, says: "The mess in the real estate field is just a symptom of big money flooding the market.

The real answer is not in the real estate field, but in the place where the money comes from and the question of how much people will have left to invest in real estate or other channels.

There is a lot of money in the country that goes to properties, apartments and land, and right now it seems that this is the best place to invest the money.

The day this tap is shut down due to a groundbreaking event that will lead to a stock market crash, no matter if we are now in a bubble or not, real estate prices will go down.

A 30 percent increase in the cost of building private homes.

Design by Shirley Dan (Photo: Shai Adam)

Dafna Biran (Photo: Yossi Zucker)

In conclusion, Byrne adds, "Of course there is also a problem of supply of apartments and high prices, but I think this situation is created because there is a lot of money circulating in the market, of unicorns and new high-tech rich, who want to invest their money in an investment that is speculative and relatively safe. "These days are for investors and not for housing developers or young couples. The state should thaw land and issue tenders for new construction, but in the end it is the amount of money that determines prices and has nothing to do with the housing crisis."

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• urban renewal