This is according to a Bank of Israel survey • As of the end of December, the market has recovered slightly and is now "only" 20% below its pre-crisis level • For real estate companies with a debt of NIS 160 billion
The income-producing real estate market is more hit
Photography:
Coco
Real estate is one of the biggest challenges posed by the Corona crisis, and its effects on the market are far from certain. Businesses have not lost hope of reopening their businesses after the crisis.
This is not just our challenge, in Israel.
This is a global challenge for which, for the time being, the answer is to postpone the decision.
In the US many countries have banned business evacuation and legal action against them so far, and in some countries this decision has been extended. All over the world the tendency of governments is not to intervene in the matter, even though these are national problems.
First, since this is not a crisis whose end date is known, so the choice to postpone the decision until the extent of the damage becomes clear is a reasonable decision.
But on top of that, these are huge sums and good arguments for both sides.
On the one hand, the property owners are leveraged in loans that are backed by the rent from the business, and on the other hand it is clear that the business owners have taken on the obligation based on expected business turnover.
The Bank of Israel's determination that this challenge does not pose a risk to the financial system is a very important determination that the markets currently believe in.
Apparently the Bank of Israel intends that the system will not collapse completely due to this complication, but it will undoubtedly be damaged and perhaps even severely.