Prices for apartments in Israel will fall over the coming year, led by Tel Aviv, according to real estate executives who participated in the semiannual survey by accounting firm Deloitte Brightman Almagor Zohar. The executives also expect prices to fall in Jerusalem, Netanya, and Petah Tikva.
The survey found that, while apartment prices in Tel Aviv were expected to fall, rents were expected to rise. 43% of the respondents expect rents in the city to rise over the coming year, compared with 29% of the respondents in the previous survey who expected rents to rise. 13% of respondents in the current survey expect rents in Tel Aviv to fall.
41% of the respondents expect apartment prices to fall by up to 10% over the coming year, 7% expect prices to fall by 10-20%, 37% expect prices to remain unchanged, and 15% expect prices to rise by up to 10%. The best places to buy an apartment are Hadera (cited by 29% of the respondents), Tel Aviv (24%), Haifa (20%), Netanya (16%), and Rehovot and Yavne (15% each).
63% of the respondents believe that the biggest problem facing contractors is not concern over falling demand, but obtaining bank financing. Consequently, 60% of the respondents believe that contractors will increasingly seek non-bank financing from financial institutions. 73% of the respondents believe that financial institutions will opt to invest in income-producing real estate deals, but only 27% expect institutions to invest more in construction.
"The current credit crunch is the main obstacle to the construction of new projects," said Deloitte Brightman Almagor Zohar partner and head of the real estate sector Doron Gibor. "This is a snowball, which is liable to lead to a rise in real estate prices, due to the lack of new construction. In effect, decisions by Israel's regulator are liable to reduce the number of new projects."
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012