"I recommend that all young couples register for the buyer fixed price plan. There are discounted apartments. You won't get apartments in the next year or two, but in four years, you'll have a key in hand.
"We're not gambling with people's housing. The idea is to make sure that everyone with an eligibility certificate gets an apartment. Apartments aren't something you build in a day. There are unending bureaucratic procedures on the way. Permits are issued by the local authorities, not the Ministry of Finance. We're exerting great pressure, and we're also taking steps to ensure that there will be a key for every apartment within four years," Ministry of Finance director general Shai Babad said today at a housing conference sponsored by the Habayit Haakademi housing club and the Herzliya municipality.
Commenting on the issue of housing prices, Babad said, "I regret that some do not believe that the minister will succeed in lowering housing prices. It was easier for our parents' generation, and today, it's more difficult for young couples to buy a home." Asked whether there was any chance of a major drop in housing prices, and whether this would cause a problem in the financial system, Babad answered, "Even if housing prices fall, the financial system won't collapse so quickly. If prices are cut in half, there will be a problem but if they go down 15%, there will be no problem."
Babad was also asked whether the discount in the buyer fixed price plan would still be relevant in several years when the buyers actually get possession of the apartments, if the price drops significantly by that time. He answered, "Even if housing prices fall, I don't believe that they'll fall 30%. If the fall is steeper in the coming years, it could be a problem."
Another question that arose during the discussion was whether it would be better to operate in the framework of grants for young couples, instead of the buyer fixed price plan. Babad responded, "Giving people checks on the state treasury isn't a good idea, but not charging money for the land is the right way to go. The buyer fixed price plan is a kind of grant. Instead of land speculation, you get discounts of hundreds of thousands of shekels a shekels on apartments. As far as long-term rentals are concerned, there is legislation now pending in the Knesset. We are providing companies with incentives to build for rent, and are also creating incentives for long-term rentals. The government has been in office for two years and two months. You can't say that there's an instant solution for the housing problem. The accounting will be at the end of the government's term. There's no way to devise strategy for a business company in two years. After four years, we'll see how many people entered apartments, and how many apartments there are. "
Another subject discussed was real estate investors and the tougher terms and higher taxes for buying by investors. Commenting on the issue, Babad said, "We don't have to give an investor an incentive to held three or more apartments. In the past, a large project by Gindi, for example, would be completed, and the investors were the main ones who bought.
"We decided that investors should stop hoarding housing. There are enough investment instruments, and we have set up enough tracks especially for investors. But if the alternative is to have them invest overseas, without decreasing the supply of housing for young couples, that's preferable. I obviously don’t want to recommend that people invest overseas. It's always better for them to leave their money here in Israel, of course, but the supply of housing units for young couples is very important."
Later in the conference, Israel Land Authority director Adiel Shimron also spoke about the question of grants. Asked whether it would be better to give young couples grants, instead of a discount on a buyer fixed price apartment, he answered, "Many studies have shown that grants bestowed by the state artificially raise prices in the area. With the buyer fixed price plan, that doesn't happen."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 27, 2017
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