Although the Central Bureau of Statistics published figures last Thursday showing a 0.7% rise in home prices in Israel so far this year, rating agency S&P Maalot sees prices falling by the end of the year. A review of the real estate market by S&P Maalot that has reached "Globes" states: "In our view, towards the end of the year there will be a steep drop in prices of up to 5%." The agency does, however, see some degree of recovery and a change in direction next year. "As far as 2021 is concerned, we see a rise in prices of 2%," the review states.
S&P Maalot analysts Gil Avrahami and Yair Dyk write: 'In the short term, we estimate that negative pressure will be generated on home prices if market demand continues to shrink, In the medium term, however, given our expectation of a fall in supply of homes, among other things in the light of the slowdown emerging in issues of building permits and building starts, and the postponement of land sales, home prices are likely to rise."
Avrahami and Dyk also cite a toughening of financing terms, and developers' concerns about the viability of starting new projects because of the economic uncertainty and the need to meet sales targets in order to receive bank finance. Although construction has been designated a vital industry, and is therefore not subject to restrictions arising from the coronavirus pandemic, it has been affected by restrictions on entry into Israel by foreign and Palestinian workers, and by workers, site managers and supervisors having to self-isolate.
Published by Globes, Israel business news - en.globes.co.il - on October 19, 2020
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