Minister of Finance Moshe Kahlon says that dealing with the housing crisis that developed over the past decade will take time.
"We have always said that it takes 10 years to repair damage done in a day. This crisis has been going on for 10-12 years. Anyone who thinks it can be solved at the push of a button is wrong it's a process," Kahlon declared in an interview with "Globes" editor-in-chief Hagai Golan at the Globes Real Estate Summit.
Golan: Maybe you thought that dealing with real estate would be quicker, like it was with the cellular sector.
Kahlon: "I want to correct you. I began the cellular reform in 2009, and we finished it in 2012. It took three and a half years. The public was just not interested in the process."
Kahlon spoke about the buyer fixed price plan, and promised, "We'll continue as long as it's needed. Land belongs to the public, the people, and the state shouldn't make a profit on land."
What do you say about warnings of inferior construction in the buyer fixed price plan for creating neighborhoods?
"That's ridiculous and unfounded. These attacks are groundless. There aren't any Kahlon neighborhoods here - it's all public relations. You can see the specifications online. It's hard for a contractor to explain why an apartment in Rishon Lezion is being sold for NIS 1.1 million when he's trying to sell one for NIS 1.7 million in the same place. How can he explain that? You've heard the story of the wife who tells her husband, 'See how successful the neighbor is,' and he answers her, 'He's a thief.' For him, anyone who succeeds is a thief."
Have you seen the movie, "The Big Short" about the sub-prime crisis in the US? Aren't you worried about the effects of the real estate bubble on the banks' stability?
"There's no risk to the banks, and if you don't believe me, read their results. Come on; give me a break. Tell me: a bank that makes 3.5 billion a year; how much is that an hour? They're constantly trying to scare us by telling us that the banks will collapse, the insurance companies will collapse, and the farmers will collapse. Meanwhile, everyone's growing, and only the people are collapsing."
Does the Governor of the Bank of Israel agree with you?
"In most things.
Asked about his past statement that he wanted to liquidate the Israel Land Authority (ILA), Kahlon answered, "The reform in the ILA needs to be much more comprehensive, but the number of fronts on which a man can fight is limited. They say you should concentrate on a narrow front. I can't concentrate on a million places. I'm not superman."
Kahlon declined to comment on the Inbal Or affair, saying, "It's a free market. I don't want to talk about it."
Asked about his forecast for next year, he answered, "Tens of thousands of young couples will get apartments at reduced prices. The $64,000 question is how the market will behave after tens of thousands of housing units are let go at reduced prices. I think it will have a positive effect. Others think it will increase prices. It can't be predicted. I have taken part in discussions with the best economists in Israel and around the world, and no one has a clear answer. The interest rate is significant, but it's where it is now, and we have to deal with that."
Published by Globes [online], Israel business news - www.globes-online.com - on March 2, 2016
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