Residential buildings in Gush Dan: will we soon see a drop in real estate prices? (Photo: Reuven Castro)
A 20-year low:
From the review of the chief economist at the Ministry of Finance, Shira Greenberg, which was published this week, it appears that October 2022 is the weakest October the market has known in the last 20 years.
According to the review, last October 5,100 apartments were purchased - a figure indicating a drop of 65% compared to October 2021, when 14,400 apartments were purchased, and a 36% decrease compared to the previous month, September 2022, when deals were signed for the purchase of 7,900 apartments.
Is this a trend that can lead the real estate market to a drop in prices?
"Without a real root solution from the government to the housing crisis, even if we see several months of correction in the price level, in the long term the prices of apartments will continue to rise," says
Eli Ronztel, CEO of the Contractors Association and the builders
Tel Aviv district and the center, "The current halt in transactions reflects the uncertainty that currently exists in the housing market.
The governor's interest rate increase and the significantly increased inflation make young couples in particular and apartment buyers in general think twice before approaching the deal.
To this, we must add the new government that will be formed, no one really knows what housing plans there will be, so people prefer to wait." Furthermore
, says Rosenthal, "in practice, there is a gap of 250 thousand apartments between supply and demand.
The current time is an opportunity for a deep-rooted treatment of the housing crisis, which begins with changing the auction system of the Israel Land Authority."
"Whoever presents the decline as healthy for the market - is wrong and misleading"
Raul Sargo, the president of the builders association Boni Ha'aretz
, reinforces Rosenthal's words, and claims that the so-called positive data that emerges from the chief economist's review for the Treasury - "only distance the housing market from the real solution, which is a dramatic increase in supply. Those who are now presenting the decrease in the scope of purchasing The apartments are healthy for the market, wrong and misleading."
Sargo believes that "these data add to a series of data that should drive sleep from the eyes of decision-makers at all levels in the industry, led by the new ministers who will be appointed soon. All attempts over the past decade to address the housing crisis by driving away buyers have failed miserably. Even if the market freezes for a few months, no change will be seen For the better in the end - the opposite is true, we are expecting a huge wave of demand for apartments that will hit the market as soon as the economy stabilizes. Judging by the top economists in the economy, this will happen in the coming year."
"At the same time," Sargo continues, "the decrease in the number of apartments sold to investors, which is 'celebrated' every month by all kinds of 'experts,' is no less dangerous. It means a dramatic decrease in the number of apartments for rent, which leaves the renters, whose number jumps every month The latter - in front of a broken trough."
"Unfortunately, as long as the real area situation does not change and the tremendous demand for apartments is not met with construction in the quantity and at a rate on a historical scale that the economy needs now, we will be approaching another period of price spikes. A spike that will further increase the instability and make our businesses, the contractors and entrepreneurs, very, very dangerous A risk that will cost us and the apartment-buying public a lot of money."
"I call on the government to meet with all the factors leading the real estate market in Israel to reach a formula that will immediately and dramatically increase the supply of land for construction and shorten the licensing procedures.
Without such a change, the result of the demand tsunami will be one:
"These data should prevent sleep from the eyes of the new ministers who will be appointed soon" (Photo: Reuven Castro)
"The Treasury's excuse for the steep drop is strange to me,"
Roni Mizrahi, president of the Israel Contractors Chamber
, continues the tone of his predecessors and explains, "The Treasury is justifying the steep drop due to the increase in the purchase tax for a third apartment to 13%. That is, according to them, in October 2021, many apartments were purchased by investors, who stopped buying in 2022 due to the tax increase. In my opinion, this is a strange excuse, because even then there was a dramatic decrease of 36 percent compared to the previous month, September 2022."
"The real reason for the steep decline," Mizrahi summarizes his claim, "is a critical shortage of 'off-the-shelf' apartments, and especially in the areas of demand, a shortage that I predict will only get worse, and will eventually lead to a dramatic price increase."
Real estate
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