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Survey: Contractors - the biggest beneficiaries of the real estate bubble in Israel; their profits jumped by about 11% this year | Israel Today

2021-10-20T21:22:55.890Z


Business information company CofaceBdi: High demand for apartments and low supply jumped profits by about 25% compared to 2020 • Company CEO: "Market situation we have not known for many years" • On the other hand, 300 companies in the industry closed, mainly due to the departure of small contractors


While potential customers in Israel are moving away from the dream of buying an apartment, there are those who enjoy the dizziness of local real estate. The current situation directly affects the income of contractors.

In 2021, there was a significant improvement in the profitability of construction contractors, with a net profit margin of 10.6% among the large construction contractors, compared with 8.5% last year - an increase of about 25%.

This is clear from data from a special survey conducted by the business information company CofaceBdi.

Looking ahead to 2022, the volume of activity in the construction industry is expected to continue to climb like a skyscraper.

77% of the contractors who responded to the survey believe that there will be an increase in the volume of activity in the industry in the coming year, and 87% predict an increase in the volume of the company's activity.

70% of them estimate that the volume of activity in the entire industry will increase this year, while 72% expect an increase in the volume of their company's activity this year.

The full survey data will be presented at the annual real estate conference of the Contractors and Builders Association of the Tel Aviv and Central District, which opened yesterday at the Dan Hotel Eilat and will end this coming Saturday.  

Eyal Yanai, Co-CEO of CofaceBdi, will present the data at the event.

"The volume of sales is high, the demand surplus is growing, the capital structure of the companies in the industry remains stable, and the ethics of payments in the industry," Yanai describes the paradise for contractors.

This is a market situation we have not known for many years, and it continues to grow more and more.

The data undoubtedly show that the situation of the construction industry in Israel is very good and is consistently improving. "

Accordingly, contractors predict a dramatic rise in apartment prices.

90% of contractors talk about a 7.3% increase in apartment prices, while last year only 65% ​​of contractors expected an increase in apartment prices, and only 49% thought so in 2019.

On the other hand, the number of active contractors in the country continued to decline this year as well: almost 300 companies were cut from the industry in the first nine months of 2021. Moreover, in the last six years, 1,000 real estate companies were cut from the industry.

"The decline is not due to difficulties in the industry," Yanai explains the apparent contradiction between the contractors' bonanza and the closure of the companies.

"The main reasons are small contractors who have left the industry or been merged into larger companies, and the fact that some of the execution has been taken over by the developers who have also set up execution companies."

Source: israelhayom

All news articles on 2021-10-20

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