The Falling Prices of Israeli High End Real Estate
It was the talk of this year’s Globes Real Estate Conference held in February in Tel Aviv. This conference is organized every year by Globes, Israel’s business newspaper. Everyone who is anyone in Israeli real estate attends. Yoav Galant, the Minister of Housing, declared that the prices of high end real estate are beginning to go down and this will be just the beginning. After this the prices of real estate all over the country will take a dive.
According to Globes, In 2016 there were less deals done in high end real estate in Israel. In 2014 there were high end real estate deals of single apartments selling for 110,000,000 NIS. In 2015 there were deals of single apartments selling for 58,600,000 NIS. However in 2016, not one deal exceeded, 45,000,000 NIS.
People familiar with the Israeli real estate market claim that this slowdown in high end real estate deals are a result of the new taxes levied on real estate transactions in the past few years. It was the campaign pledge of the Minister of Finance to not only halt the ever rising Israeli real estate prices but to cause prices to go down. He started to chip away at investors of Israeli real estate by raising purchase tax sharply and doing away with the exemption from capital gains tax. Now, he has pushed through legislation for the taxation of people with multiple apartments.
Whatever the reason, this means that those wanting to purchase high end real estate can do so at lower prices. In 2008, when real estate prices fell all over the world, Israeli high end real estate suffered as well, although the prices rose again in the following years. It is happening again now.