Last month, “Globes”, Israel’s leading financial newspaper, hosted their annual real estate conference at the Intercontinental Hotel in Tel Aviv.
As happens every year, everyone who is anyone in Israeli real estate attended, including investment companies, private investors, bankers, realtors, real estate attorneys, architects, town planners and contractors, even individuals interested in land investment.
Many current issues concerning Israeli real estate investment were addressed at the conference. The opening session explored statements made by politicians over the past year regarding Israel’s real estate market and they discussed which of those statements have actually been fulfilled so far.
In various forums throughout the day, participants heard from representatives of the Bank of Israel, mortgage banks, the Israeli Land Authority, contractors and several mayors about many of the difficulties facing the Israeli real estate market today and their causes.
Additionally, new trends in Israeli real estate were discussed and analyzed. While no real solutions were offered, Israeli real estate investors would be wise to attend this event in the future to keep abreast of Israeli real estate property investment news.
One issue discussed was the credit crunch and the difficulties Israeli contractors have in obtaining credit for construction projects.
This has been a hot issue in the past year and the reluctance of Israeli banks to give financial backing to construction projects has prevented apartment prices from dropping, despite the fact that a lot of land has been made available for construction projects all over the country.
It had been hoped that the solution to rising housing prices would be the freeing up of lands for construction projects, but this hasn’t happened because the banks are not willing to give construction loans as readily as they were in the past. Also, the point was raised that much of the land earmarked for construction was located far from the commercial center of the country, where fewer jobs are available.
The issue of constructing apartments for rent only was raised as a possible solution for families who cannot afford to buy. The experts who spoke agreed that this is currently not a viable option in Israel because the profit that investors can earn is not high enough. It was agreed that these projects will need government subsidy in order to be a worthwhile investment.
In one forum the mayors of Netanya, Rishon Letzion, Ashkelon and Hadera discussed the issues facing them. It was suggested that the municipalities be given a greater voice on government committees determining national zoning and town planning policies.
Too often projects are planned for areas without consulting the municipalities that will be responsible for absorbing the people for whom the projects are being developed.
The final lecture discussed the advantages of using the most natural of resources, the sun, by using rooftop solar panels to create electricity.
Afterwards, a poll was taken asking participants if they believe that apartment prices will go down, and the majority think that they will not.
At next year’s “Globes” Israeli real estate conference, we’ll see if we were right or wrong.