After nearly a year, the coronavirus crisis is hopefully over, and real estate prices just keep rising. Even in commercial real estate (offices and stores), which was expected to collapse, the Bank of Israel has released absolute numbers that show the market has rallied after a decline of 40%, and will in any case not pose a threat to the economy.
Follow Israel Hayom on Facebook and Twitter
The Finance Ministry reported a 15% increase in the sale of new apartments in November. Compared to October, which included a lockdown and the holidays, this represents a 45% leap. Demand is high, and there is some concern that the supply won't keep up, especially with the pandemic slowing down processes. According to the rules of the market, this will result in higher prices.
"The severe apartment shortage has grown worse over the past year due to the pandemic, and the government has no plan to increase the supply," warns the Association of Contractors and Builders. "Alongside issues such as long-drawn-out planning and construction procedures and the cancellation of urban renewal projects, the pandemic has caused a shortage of workers. This will decrease supply even further and hurt the market's stability."
Take, for example, the real estate companies. They're breaking records. Each time lockdown restrictions were eased, supply skyrocketed. Or take two luxury projects – the Azorim project in Ramat Gan and the Africa Israel residential tower on Ibn Gvirol Street in Tel Aviv. Hundreds of apartments were sold there in less than two months.
The investment market recovered after Finance Minister Israel Katz reduced the purchase tax. Data collected by the Chief Economist's office at the Ministry of Finance indicates the market is booming. Real estate investors who own at least one apartment bought 2,100 new apartments in November – the highest rate since April 2016.
Or take the third quarter of 2020, in which 25,800 apartments were bought on the open market – a 9% increase compared to the third quarter of 2019 and the highest rate since the first quarter of 2017. I repeat: the highest rate in the past three years. Duh! Coronavirus?
In all fairness, I should say it isn't all black and white. The increase in real estate deals skipped the areas where demand was highest before the pandemic – Tel Aviv and the Central District, in both of which the number of deals fell compared to the same quarter in the previous year. In the Tel Aviv area, the number of deals was less than 2,000 – the lowest proportion of deals in this area in a historical comparison.
Subscribe to Israel Hayom's daily newsletter and never miss our top stories!
They say what comes up must come down, and vice versa. Take the mortgage market. It just reached a peak of 78 billion shekels in one year. In a 5-year comparison, 2020 was a peak year in mortgage loans, more than 2019, when mortgages totaled 67.7 billion shekels. Coronavirus?
What will 2021 bring? God only knows. But based on the vaccination drive and its outcome so far, allow me to look at the coming year through pink glasses – just like the color of our hair.
This article might include sponsored and commercial content/marketing information. Israel Hayom is not responsible for its nature or its credibility. The publication of such content or information shall not be considered a recommendation and/or an offer by Israel Hayom to purchase and/or use the services or products mentioned in this article.
