An article in the March 11, 2012 edition of “Globes” newspaper reported that 10 percent of Israelis do not rule out buying an apartment in the next six months, based on a study conducted by “Globes” in conjunction with PwC Israel. This figure represents an increase from January 2011 when 9.8% of Israelis intended to buy an apartment, and from July 2011 when only 6.3% said that they planned to buy.
Does this mean that Israeli real estate is coming out if hibernation? Perhaps it does.
The Israeli real estate market, like any other industry, is influenced by rumors and declarations of politicians. When the politicians declared that Israel is in the midst of a real estate bubble a race to burst this bubble began. The race was held by several politicians hoping to get credit for bringing apartment prices down. Each declaration to the press was followed by actions engineered to lower prices, for example changes made in land taxes, new rules by the Bank of Israel and new zoning laws. These changes were made by different politicians, each with their own agenda, and lacking any cohesive policy that took into consideration the big picture.
The result has been massive public confusion. The big question this past year has been “should I buy now or wait for prices to go down”?
I believe that people cannot sit on the fence for long waiting for apartment prices to go down. People need a place to live and in the absence of major projects for the construction of residential housing for rent, people need to buy.
We live in dynamic times, in which families grow, and new jobs force people to reconsider living arrangements, all resulting in the need to sell. Additionally, many of the legislative changes recently enacted to deter the purchase of apartments as a real estate investment have not attained their goals, as many property investors still prefer investing in real estate rather than stocks and bonds.