Before starting to talk about real estate, you should get to know Ron Avidan (54).
For over 30 years he has been gradually climbing the management hierarchy in the industry.
He attributes part of his success to the education he received at home.
There he grew up and was educated alongside his father, Amnon Avidan, who was a basketball player for Maccabi Tel Aviv, played in national teams and lit the torch for the eighth Maccabi.
"The instinct of competitiveness, the desire to lead, to excel, and the professionalism in everything I do, I absorbed from my father's house," says Avidan, who today shares a house in Jaffa together with his wife, the theater actress, Limod Goldstein.
"It is a great advantage to live next to a leading theater actress in her field for 20 years.
Her field of activity is very different from mine, it creates interest and also mutual fertilization".
Ron Avidan, CEO of 'Azurim', heads one of the largest real estate companies in the Israeli economy, and as such he serves as a seismograph of the market situation today.
We chose to open cards close to the chest, around the changing market situation.
Demand will continue to grow,
the market is changing.
How do you and the company feel about it?
"There is no doubt that the increase in interest rates and inflation affect demand, but the problem of supply remains the same.
In every project we went to market this year, we met demand.
This was the case in the urban renewal project in Neve David in Haifa, in the Ariel Sharon neighborhood in Hariya, where we have already entered phase three, in the "Symphony" project in Kiryat Sharet in Holon, and in our extensive activity in the field of urban renewal in Netanya North.
Of course, it's not the same rate as it was here in recent years, and there is a higher cost to generate leads, but the demand is there."
"The fact that the interest rate works as a cooling effect, no one disputes.
The fact that mortgages have become more expensive is a fact.
But there is also no perception in the market that prices are going to drop in just a moment.
You don't see an announcement of any policy outline 'wait prices are going to drop'.
Finally, it should be remembered that there is uncertainty that permeates the buyers and creates a feeling that it is time to purchase an apartment and not wait.
Buyers do not sit and wait for prices to fall.
On the other hand, there is no hysteria in the short term of a significant price increase."
When you say, there is no hysteria, then the investors don't want to buy either?
"Investors also have banking alternatives and are also affected by a high level of uncertainty, so they are now sitting on the fence.
I estimate that as the picture becomes clearer, in the second half of 2023, they will return.
The chronic problem is a lack of supply that fails to catch up with demand.
This is a problem that has not been solved and is not going to be solved, certainly not in the near future.
Investors understand this.
Look what happens to the rent prices that continue to rise."
The real estate companies' race for land, leaving you with no reserves?
"The Azorim company does not have a problem with land reserves, in the last three years we have done quite a few transactions.
Only in Jerusalem did we purchase land in Romma, Har Nof and also in Pet Junction in a combination deal with Delek Properties.
Today, under the leadership of Mayor Moshe Leon, Jerusalem is a city undergoing a fundamental change.
To the transactions in Jerusalem are also added transactions in Tel Aviv that the Azorim company has, such as the combination transaction we did in Nachalat Yitzhak and the purchase of the lot on Hamsgar Street with Delek Properties.
So we don't suffer from a lack of land for development."
What about historic lands? Is there a shortage?
"Historical lands are by their very nature a perishable product.
'Zerom' has long since stopped building on the historical lands.
Look at the five projects we have recently released: two projects in Weizman and Sokolov in Netanya, one in Neve David Haifa, one in Givat Shmuel and one in Shvetim in Bat Yam - all five of these are not built on historical land, this is the result of a significant urban renewal activity promoted by the company.
Those who preceded me were smart enough to enter this activity a decade ago, by the way, with the understanding that there would be a shortage of land supply.
The result today is that many projects are reaching maturity and we have in planning about 60 urban renewal projects in various planning stages, and over 21,000 housing units that are expected to be built in these projects.
This "machine" of evacuation-construction in the areas works very intensively.
There is no doubt that this is a very significant growth engine in the company.
The regions have a very significant advantage, and this is the fact that alongside activity in promoting massive urban renewal projects, the company continues to promote conventional entrepreneurship.
This is how we spread risks."
How do you deal with interest and long-term rent?
"Azorom's view of corporate rent is a long-term view, 10-20 years ahead.
It is true that the increase in interest rates affected the ability to continue developing the field, but we think that this is a short-term effect.
In addition, we strongly believe that the demand for long-term rental apartments gives certainty and provides a high standard of living for tenants, so the expectation is that the demand will only increase.
It should be remembered that about 30% of households live in rent, and in my estimation this percentage will continue to rise in the coming years.
We have 800 profitable apartments and another 1,700 apartments in various planning and construction procedures."
Evacuation and construction project, Weizman neighborhood Herzliya, photo: 3dvision imaging
Would you believe that the prices in the "Herzliya Hills" project, for example, on a main road, will reach where they will?
"Living close to a main thoroughfare, which in the past was seen as a major disadvantage, today is seen as an excellent transportation accessibility solution.
People are afraid to stand in traffic today.
The 'Herzliya Hills' project sits on three major traffic routes - the beach road, Ayalon and the Seven Stars Road.
Add to that a heavy train and to that you will add the change of the market's approach towards mixing uses.
People today are looking to live close to a busy shopping street, cafes, restaurants, and offices.
We created a mix of commerce that matches the wishes of the residents and we see how successful it is there."
Is this what easily led to the Exchange Ramat Gan project?
exchange ramat gan project_Azurim and Migdal Insurance, photo: 3Dvision imaging
"Definitely.
The confidence we gained in Herzliya Hills affected the ability to promote the mega project at Ilit Junction.
Here, too, these are two main traffic axes - Arlozorov and Jabotinsky, and the most important thing is that the project is located on a station of the light rail of the Red Line.
People understand that this is the future of housing.
It is already implemented in leading cities such as Tokyo, New York and London.
The ability of a person to live in a prestigious and high-quality project with commerce, businesses, gyms, luxurious rooms and a light rail that goes everywhere, is an innovative and modern concept of living that has significantly upgraded the area of the Stock Exchange.
In the last year, housing prices increased by about 20% and their reports indicate an increase of about 30% from 2018.
Does that surprise you?
"When the government focuses its efforts on the demand side, it won't have much of an impact on housing prices downwards.
All the programs she promoted - price for the resident, target price, zero VAT, the purchase tax increase - operate on the demand side and do not make any significant move designed to increase the supply.
True, they have significantly increased marketing, but this is not the be-all and end-all.
Beyond the centralization inherent in RMI, we all suffer from a bureaucracy that is becoming more and more difficult.
Look at how many years it takes to approve a building permit, how many years it takes to issue a building permit, how difficult it is to get Form 4. All these processes are getting longer and harming the ability to increase the supply."
If you were Minister of Housing, what would you do?
"First of all, I would pass a government decision that the housing problem is a national project.
Then I would suggest looking into the possibility of appointing a projector and giving him powers vis-à-vis all the ministries concerned.
Establish a work plan and stick to it until they manage to significantly reduce the barriers that exist in the industry.
There are no "Zabang" solutions and we are done.
There is also the issue of the manpower shortage in the industry.
Even if all the processes are fast, there is not enough executive power in Israel to meet the demands.
In short, we need a comprehensive solution that attacks all the elements in the equation, the result of which at the moment is an increase in housing prices."
So you don't see the prices going down?
"No, and even if there is a decrease in 2023. It will be selective and moderate."
What about the periphery?
"We see the periphery as the next thing.
We have no doubt that over the next few years the demand for residences in the periphery will increase, which is why we are currently looking at various projects mainly in the north, in Kiryat and Haifa.
The Carmel Castle has also become a sought-after destination for urban renewal."
Is there any news?
Mostly hope.
So in conclusion, where are Azorom going in 2023?
"Today we work full time and invest the most efforts and resources in projects that are planned to be marketed in the near future.
'Azurim' will continue to do what it does best - initiating residential projects in Israel.
Only in the coming year, the establishment and marketing of 2000 units are planned.
In total, we have 29,300 units in the backlog of projects in the stages of execution, planning and reserves.
As I mentioned, we will also continue in the field of urban renewal with our feet on gas.
We have about 6,000 units in future urban renewal projects with an approved PBA, and we are invested in implementing them as quickly as possible.
Only in 2023, we have 740 units in five additional projects that are in an advanced licensing process and are expected to go on the market.
One of the big moves that await us this year is the marketing of the regeneration project in Weizman Herzliya.
In my opinion, this project is one of the largest done in Israel with the demolition of about 600 housing units and the construction of 1,800 units.
We are responsible for establishing the neighborhood from end to end - for infrastructure, commerce and public buildings.
This is something I'm really looking forward to.
In addition to all this, of course there is the activity in the yielding field and in the field of long-term rental.
We have 800 units yielding today and we have another 1,700 units in various stages of planning and execution.
The coming year is an excellent opportunity to invest in what we have and run forward."
Ron Avidan, photo: Reuven Castro
T.Z. Ron Avidan
Age 54
Marital Status Married + 3
The beginning of the journey was an officer in the Intelligence who was released after a year of permanent service.
He studied economics and management and during his studies for a master's degree in business administration,
he was exposed to the field of real estate, fell in love, and later began to study appraisals and real estate management.
The dream residential public activity
was born and raised in Tel Aviv.
Lives in Jaffa today.
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