There are no construction starts, the corona has only exacerbated the gap between supply and demand, and the political outbursts do not add to the cooling of the real estate industry • Senior executives in the field have already given up, with both contractors benefiting • The temporary solution: long-term lease
Buildings under construction
Photo:
Ami fat
By simple business logic, the corona year was supposed to also launch the real estate industry rebuilding itself. But the demand here is higher than YOU and Azrieli Towers combined, which at most sales in the field froze for a moment - and that's it.
The problem, as usual, is the imbalance Between the public's demand for new apartments, and the worsening reduction in construction starts for a thousand and one reasons.
"Construction starts have been at a low for several years, but the last year has been the worst of them," said Yehuda Ketab, chairman of the Tel Aviv District Contractors Association and vice president. According to the CBS, "Since the beginning of 2020, only about 35,800,000 new apartments have begun to be built in Israel - data for the first three quarters of 2020. Even if in the annual summary of 2020 that the CBS is expected to issue in mid-March, there is a recovery in the last quarter. It is still a serious slump in the beginnings of construction, the significance of which we will unfortunately feel in the coming years. "
The findings of a reporter drain into the dismal bottom line: "In Israel, there is a shortage of housing solutions for more than 100,000 families. This situation has lasted for more than a decade and has worsened over the years. The decline in construction starts has a dramatic effect on a possible increase in the number."
Despite the Jewish-Israeli culture that pushes the public to buy houses and apartments, in the current economic atmosphere in the economy, not everyone in Israel will be able to get to own an apartment, especially not in the area where they want to live.
Therefore, there is a need for a suitable supply of apartments for rent along with proper information that will lead to a cultural change in the preference of living style. "
Why is there a decrease in construction starts?
" This is the result of several facts, including procrastination and lack of government treatment. The corona only deepened.
Israel's minimum target is to start construction of about 70,000 housing units a year.
For the purpose of establishing them, there are currently about 33,000 foreign and Palestinian workers missing for jobs defined as 'wet', and a significant number of Israeli workers.
The failure of the workforce in the industry will eventually lead to hundreds of thousands of young couples improving housing and new immigrants who will not find a housing solution. "
There is a question of egg and chicken, because many believe that high real estate prices prevent young people from buying an apartment. The question is whether they are a result of the shortage of manpower, or even if there were working hands prices would remain in the sky?
He wrote: "The government should encourage Israelis to work through Increased grants, professional training and a clear employment horizon.
At the same time, the government must increase the quotas of foreign workers currently approved.
It is important to wake up and beautiful one hour earlier.
If the current situation continues, the chaos in the industry will intensify, and then it will be difficult to impossible to bridge the growing gaps between supply and demand for housing in Israel.
When supply does not increase, and while natural growth in Israel continues and more and more individuals and families need shelter, the public will continue to pay the price with significant price increases for apartments in Israel. "
Shmulik Levy, owner and CEO of the Ambassador Group, specializing in consulting, planning and marketing for real estate companies "He also blames the government but also floods other, more professional reasons.
" Massive and rapid construction has not been seen in recent years, as we have seen in Kiryat Gat, plowing and intelligence, "Levy updates," since most of the projects that have been marketed in recent years have been price per occupant.
Only a third of the total number of housing units allocated to the free market.
There is a real mismatch in relation to the demands on the ground.
These are also areas that were suitable for decision makers to promote and that were superior to others for different considerations and for different sectors.
In addition, the apartments that were allocated to the free market matched the levels of demand at the time of planning and not in the future and especially without examining the needs of demand and natural growth.
Even in the area of private land designated for construction for the free market only, there is an almost full realization of the construction and development potential of large real estate companies that held historical land reserves. "
Where do you think the solution lies?
Levy: "The potential of land reserves in areas of demand could provide a future solution to the shortage of apartments, coming from complexes that change their designation as military bases like Tzrifin and Sde Dov. This along with urban renewal plans in a mass of hundreds of city centers in Gush Dan. "Therefore, we will continue to see price increases in addition to the rising cost of living, which will also be reflected in rising rental prices. The solutions for long-term rental housing - the right and welcome direction - are in quantity and volume a drop in the ocean."
Levy cites Ashkelon as an example of a long-term solution.
Although it is not close to Gush Dan, it is a significantly developing city.
"It is planned to double in size within a decade to almost 300,000 residents. New neighborhoods have been built over the years, but the main mass began last year with the construction of the Wine City neighborhood, where more than 11,000 apartments are planned to be built."
The population has grown The
reality imposed on Israel in the past two years is something that even the best creative screenwriters would have a hard time rewriting.
In a delusional and impossible political climax that included four rounds of elections in two years and a devastating global epidemic that paralyzed the economy for months, the real estate market fails to stabilize and cool down.
Yair Cohen, CEO of Avnei Derech Property Management Company, combines political instability .
"A short tenure of a unity government was in our favor. A drastic increase in the Israel Land Authority's tenders for the free market is needed, and a reduced price to address the acute and ongoing shortage of land available for construction. The shortage leads to aggressive competition between dozens of large developers for each tender. To the north and south, we will reduce the gaps between Gush Dan and areas outside it.
Finally, the population growth rate of almost 2% per year plus the shortfall created by the gap between supply and demand of the last decade that intensified in Corona - continues to ignite the rise in prices. "
The government that will be formed, if and when, will have quite a few headaches to deal with before real estate - which only accelerates the pessimism of the people in the industry. "Even the Corona has not been able to break the residential real estate industry and bring about the desired change," says Michal Gur, CEO of Coral Entrepreneurship Company, "That's why I do not want to sound like a prophet of rage, but even in 2021 we will not be in the ranks.
The acute and persistent shortage of available land for construction leads to aggressive competition among dozens of large developers for each tender. "
What should the new government do first and foremost?
Gore:" The new government must act immediately to establish a housing cabinet that will work vigorously to increase available land;
"Promote construction evacuation plans by urban renewal to increase the number of apartments in cities; reduce bureaucracy and shorten the time to issue permits so that it does not exceed one year; increase staffing in planning committees and provide economic incentives to local authorities."
Another black woman, in this context, is Bella Barda-Barkat, an expert in real estate and urban investment.
"Apartment prices will continue to soar, even if at the beginning of the Corona crisis a year ago there seemed to be a stalemate - it was only momentary," Barda-Barkat said. "The slowdown in construction starts is a major component of this increase. There is no doubt that demand is greater than supply. In the long run, it seems that the excess demand will continue to push up prices significantly. "
In her opinion, the long-term rental market will become popular "especially in the central region of the country, where price increases have been very significant in recent years to the exclusion of the middle class. The high corona and unemployment and a slowdown in transactions will lead developers to turn to the long-term rental market."
