The effect of Operation Pillar of Cloud, which ended in mid-November, continues to affect foreign real estate investors. Real estate agents who work with foreign buyers said that they cancelled purchases of homes and sold apartments, even at a loss, and that this sector of the market is now dormant.
"Since Operation Pillar of Cloud, I haven’t had even one phone call from a foreign resident. Even when I called foreign residents, they told me that they weren’t interested in increasing their investment portfolios in Israel at this time," Nadlanchik Boutique Real Estate Ltd. owner Meir Lisker told "Globes". He adds that foreign residents who bought apartments for investment in Ramat Gan panicked during the military campaign and sold the apartments when the fighting began.
Lisker said that a French and Italian homeowner called him on the first day of the operation to sell nine apartments they bought two years ago in Ramat Gan's City Tower at any price. "I told them that this was a mistake," he said, "but they didn’t want to listen. I offered the deal to Israeli investors with whom I work, and they agreed to buy the apartments at a 15% discount. The foreign residents agreed, and within 48 hours came to Israel, signed the contracts, and all the apartments were sold. They had taxis waiting outside the building and they rushed straight back to the airport as soon as the contracts were signed."
The Italian sold five apartments and the Frenchman sold four apartments. The two-room apartments, ranging in size from 60 square meters to 90 square meters, were sold for NIS 11.9 million, at an average price of NIS 1.3 million. They were bought at an average price of NIS 1.5 million.
Other real estate agents who work with foreign residents also say that interest in Israeli real estate has plummeted since the campaign. "Customers who came with me and my French colleague have stopped looking since Operation Pillar of Cloud," says Mangal Real Estate CEO Dror Mangal, which specializes in properties in north Tel Aviv. "European Jews are scared of wars and missiles. The moment the campaign began, they folded and it will take time before they return."
Raveh Properties and Investments Ltd. co-owner Alon Gedalyahu, based in Tel Aviv's high-end Ramat Aviv neighborhood, also told "Globes" that the campaign has affected business with foreign residents, and he predicts that the situation could worsen in 2013. "We're not seeing foreign residents in the market. There is no activity by them at present. I predict that demand will continue to fall during 2013. Already, I've had to cut rent for apartments we're managing for foreign residents by 10%, after six years of rising rents. People cannot make these payments. It's also affecting investors."
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2013
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