ISRAEL Trends and Developments Contributed by: Hagit Bavly and Hadil Nassif, Arnon, Tadmor-Levy
Arnon, Tadmor-Levy 132 Menachem Begin Rd Tel Aviv Israel
Tel: +972 3 608 7777 Fax: +972 3 608 7724 Email: info@arnontl.com Web: www.arnontl.com
General The real estate market in Israel has experienced changes in recent years, some global (such as the global economic crisis) and some local (mainly, the actions of the coalition parties in the Israeli Parliament to try and change the judicial system in Israel, and the significant public pro - tests that arose as a result of such actions), as well as the war in October 2023. All these have plunged the real estate market in Israel, and the Israeli economy as a whole, into instability, with a resulting decrease in business activity and a rise in prices. The Israeli economy as a whole (and in particu - lar the Israeli high-tech industry) as well as the Israeli real estate market stand on strong bas - es, and therefore the intensity of these changes has not been great. Assuming it will not take too long before Israel reaches internal political and regional stabilisation, this period should not have
According to the Bank of Israel Annual Report for 2023, in the third quarter of 2023 there was a recovery in the volume of transactions in the residential market and a decline in residential units’ prices, particularly in the prices of new residential units. At the beginning of the fourth quarter of 2023, after the outbreak of the Octo - ber war, the recovery in the residential market was halted and there was a sharp decline in the number of residential units’ sale transactions, due to the broad recruitment of civilians to their reserve duty and the continuation of the war. According to the Bank of Israel Report, 2023 was the first year since 2018 in which residential prices declined by 0.6%. The areas of demand that are central Israel in general and Tel Aviv in particular “led” in the decline in prices. The main cause of the decline in prices was the accumula - tion of the new unsold residential units. In November and December 2023, the index of residential prices increased again. It is pos - sible that the increase in prices was caused by demand for new residential units, with the expectation that in light of the war there will be a slowdown in the number of residential units for sale, and the expectation that the shortage of new residential units will continue for more than the short-term.
long-term effects. Residential Market
The slowdown trend in the housing market (due to the increase in interest rates that began in 2022) and the increase in prices of residential units after the COVID-19 crisis continued in 2023.
438 CHAMBERS.COM
Powered by FlippingBook