"In September, we sold land for 10,000 housing units, and this month we should complete sales for a further 10,000 units. But in some of the tenders, such as in Dimona, there are no bids, and tenders there are starting to fail, particularly tenders with special characteristics, such as sheltered housing," Israel Land Authority director Yaakov Kwint said at the Real Estate Summit conference taking place in Eilat.
Kwint commented on the question of how housing prices could be brought down and why there was short supply, and said that in areas where there was a problem of financial viability, contractors were not rushing to make bids and were not prepared to take part in tenders.
It should be pointed out that in the past two months two tenders were held in Dimona, comprising a total of 1,500 housing units, of which 250 are for sheltered housing and the rest for high-density construction, but there were no bidders.
Kwint added that the Israel Land Authority had published large tenders in Ramat Gan, Rehovot, and other areas in the center of the country. "70% of our sales are in high-demand areas, and in 99% of the plans, the local authorities are our partners, and in my view they should be given more for public institutions and for development."
The discussion became heated on a panel on the subject "Between the housing crisis and the political crisis: How can housing prices be brought down without a government?", in which the panelists, besides Kwint, were Uri Yonissi, head of the mortgages division at Bank Leumi, Ygal Dimri, CEO of Y.H. Dimri Construction and Development, and Ministry of Finance Deputy Budgets Director Tzahi David.
Dimri raised complaints about the amount of time it took to transfer land to a developer, and to obtain a building permit. "It takes me more time to obtain a permit than to build the project," he said. "It takes me three years to get a building permit."
"Demand in relation to supply is a catastrophe," Dimri added. "I pray for stability in real estate prices, but in today’s situation it won’t happen. Within another ten years there will be a shortage of tens of thousands of housing units."
Yonissi hurled accusations at the government representatives, saying, "There’s a feeling that there are people sitting here who don’t understand that we are in an emergency."
Yonissi said that the average size of a mortgage loan was currently NIS 1.038 million. "That’s the size of the mortgage of a young couple, while wages have not kept up, and all of this burden falls on the young people and on their parents," he said, adding that a solution to the problem required all the relevant people to work together. "The time has come after twelve years to think about the whole bunch of restrictions and to think about a solution above 75% mortgages, instead of young couples looking for solutions among non-bank lenders. The market has been at the level of 85% mortgages before," he said.
Yonissi stressed that he did not agree with the director general of the Ministry of Construction and Housing that the party was over. "We are coming after fifteen years of rising prices. Every home has tripled in price. And there’s a psychological effect that causes further rises, and who can deal with the psychological effect? As long as there’s no development of long-term rental solutions, the housing crisis will not be resolved. Someone has to understand that we’re in an emergency."
"Everyone talks about building starts and interests rates," David said, "Building starts are high, and the barriers can be reduced. There remain sonly the question of the desire to build. We are in a position of excess construction, and what goes up must come down. All these figures point in an optimistic direction, and the question is not whether it will happen, but when the decline will begin."
Published by Globes, Israel business news - en.globes.co.il - on October 24, 2022.
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