Gazit-Globe chair: Home prices have peaked

Chaim Katzman: The real problems in the real estate market are bureaucracy and planning.

"Home prices have peaked because 30% of apartments are for investment," said Gazit-Globe Ltd. (TASE: GLOB) chairman Chaim Katzman at an economic conference in Tel Aviv today.

Commenting on Minister of Finance Yuval Steinitz's latest tax measures in the housing market, Katzman said that the real problems in the market were bureaucracy and planning. He said, "It is necessary to immediately release the bureaucratic barriers. They are always talking about over-concentration, but Israel has a bigger problem: there are no long-term plans. This was reflected in the finance minister's remarks this week. I think that you don’t need a 5-kilogram or a 10-kilogram sledgehammer to deal with the economy. You don’t need hammers at all - that's going back to the 'wham, bam, thank you ma'am' method. You need a long-term strategy."

Katzman also dismissed comparisons between the Israeli and US real estate bubbles, saying that the two countries were in completely different places. He admitted, however, "Low interest rate contributed to the rise in home prices in Israel."

Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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