Before the war, there was quite a bit of talk about the stagnation in the real estate market – the high interest rate in the economy reduced the feasibility of construction and made mortgage costs more expensive, contractors built less and buyers sat on the fence. The war worsened the situation, and now the real estate industry, which is so important to the Israeli economy, is almost completely shut down.
Is this actually an opportunity for those looking to purchase an apartment? Chairman of the Real Estate Appraisers' Bureau Nechama Bogin, guest of Israel Hayom's economic podcast "Added Value," believes so.
"We see a halt in the number of transactions"
"There's no doubt that we're seeing a halt in the number of transactions in October, we've seen it before because of the interest rate increase. As someone who has been in this industry for more than 30 years, I can tell you that fortunately in the Israeli real estate market, the recovery period from the crisis is very rapid.
"Added Value" podcast Sonia Goroditsky hosts Chairperson of the Real Estate Appraisers Bureau Nechama Bogin,
"People need apartments, and in the end the 'occupied' demand bursts back, the problem is that supply is also falling. Construction sites have stalled, building starts have stopped, but demand continues to pile up. People get married, divorced, during such times there is also a return of Jews from the world, because there is an outbreak of anti-Semitism and they understand that it is safer here. In addition, it is impossible to ignore the fact that there are also 150,<> displaced persons, some of whom are looking for housing solutions."
So what do you recommend doing?
"If you're selling and you can wait a bit, you'd better wait because prices will go back up in my estimation. If you're buying, it's a great time to buy for the same reason."
"I will note that even after every crisis there are changes in tastes. After COVID-19, people learned to appreciate their living space due to lockdowns, looking for a creator of garden apartments, apartments with a study and more. Now the star will of course be the safe room, there is no doubt that apartments with a safe room will be in higher demand than apartments without."
Increase in demand in the Sharon area, Netanya, Hadera and the surrounding area
Regarding the demand map in the housing market, Bogin says: "In terms of demand, we see two extremes: there are cities, such as Ashdod and Ashkelon, that have been very difficult shooting ranges, and people are afraid to enter apartments whose construction has been completed."
Construction site in Be'er Sheva, photo: Dudu Greenspan
"On the other hand, if we take the Sharon area, Netanya, Hadera and the surrounding area – in these places there were almost no sirens, and they live in a bubble that doesn't feel what's happening – and there is actually an increase in demand. People are looking for apartments there to enjoy the quiet there. There is no doubt that in the current period there is a very significant impact of the location."
Bugin also referred to the construction industry, which is largely shut down these days due to the severe shortage of workers. According to her, "We must not forget that the real estate industry is a significant engine for the economy in the State of Israel, it must not be stopped for a moment. I regularly participate in discussions on the construction industry in the Knesset, and the issue of every person is now in very intensive discussions in the Knesset Interior Committee."
"We're starting to see more companies facing difficulties"
"We are starting to see companies facing difficulties, we must not forget that the construction industry entered the war period already in distress as a result of a long period of rising interest rates. The war was another blow to the real estate industry, and the state must take seriously what is happening.
There is a lot to do, there are a lot of barriers that can be removed, and nicely one hour earlier. I'm not only talking about helping real estate companies during the war, but also about removing bureaucratic barriers, enabling construction companies to get to Form Four faster, putting the apartments on the market in order to prevent a worsening of the real estate crisis and also so that they reach a stage where they receive an additional share of the proceeds from the buyers."
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