Director General of the Ministry of Housing: "The trend has reversed - the power has passed to the apartment buyers"

26/10/2022 à 9h55 от Ynet

Aviad Friedman said at the real estate summit conference in Eilat that the interest rate hikes led to the fact that "people stopped buying apartments because they are afraid that tomorrow their price will go up", and noted that "buyers must know their capabilities and argue about every shekel with the contractor"

"We are in a different period today, due to the increase in interest rates and several other factors. The trend in today's market has reversed, these are no longer the days when people said they were buying an apartment because they were afraid that tomorrow its price would rise. The power today has passed to the buyers and they must understand that." This is what the Director General of the Ministry of Construction and Housing, Aviad Friedman, said today (Monday). According to Friedman, the Bank of Israel's interest rate hikes have changed the game, and it is important that apartment buyers and the general public understand the new situation.

At the real estate summit conference of the real estate center in Eilat, the CEO of the Ministry of Housing added that "people must look around and understand the situation. The interest rate has increased, and there are many other things around the price of the apartment that have also increased. Brokerage fees on apartments have gone up, purchase tax has gone up, both for investors but also for buyers of single apartments who today have to pay higher amounts because of the high prices, attorney's fees are also a lot of money today. And this is all outside of the mortgage. People must understand the environment and see that they carefully check their income, their capabilities, before entering into a purchase transaction. Both new apartments and in the second-hand market."
Will the construction time be shortened? The "self-licensing" reform is underway
Another lottery for discounted apartments is underway: which settlements can you register for?
Downsizing: Why are more small apartments being built in Israel?

Friedman addressed the buyers and stated: "Buy apartments with financing and leverage that you can afford. Also check what the interest rate says, but also take into account what will happen with another increase in the interest rate." He urged the buyers to be smarter and to act correctly in front of the sellers: "Haggle for every faucet in a new apartment, for every kitchen and for everything. This is the time to do it. The power has passed to the buyers, and now you have to fight for every shekel. Everything has a different meaning today With the rising interest rate. Are you looking for an apartment in a certain neighborhood? Do a survey among all the contractors and see who offers more things, what the contractor is willing to give."
Friedman also talked about the market data, the construction starts and the supply, and sounded optimistic: "There are high construction starts and they will continue to rise. I know the data. There is a supply, there are 50,000 unsold apartments. The auctions are also no longer closed at the prices that were closed in the past. What will happen in my opinion In the future, there will be tenders that will not be accepted, but in the future they will be accepted at lower prices because the contractors must continue to motivate the system and work."
Friedman also said that the current situation in the market will cause another change - the acceleration of urban renewal processes, and this following an unexpected angle: "Some of the housing improvers in the buildings relevant to urban renewal have always faced two choices - either to improve housing and buy an apartment, or to promote urban renewal - a long and tedious process Today, more and more developers realize that they cannot buy an apartment and therefore choose the second way, even though it is longer. I think we will see it on the ground."
"There will be no irresponsible freezing of TAMA 38"  
At the conference, it was also possible to hear other senior officials from the real estate industry. The CEO of the Governmental Authority for Urban Renewal, Attorney Elazar Bamberger, referred to the metro project and urban renewal, for example: "There will be no irresponsible freezing of TMA 38 throughout the metro. The main points of our recommendation They include a freeze in the core areas of the metro where no permits have been issued in the next two years. There are no restrictions at all from 300 meters or more from the core of the station. In the range between 100 and 300 meters - there will be an individual discussion for each project."

Bamberger also referred to the authority's goals after the elections and his recommendations to the government that will be formed: "In the first three quarters of 2022, over 450 permits were issued for the implementation of TMA 38, which include over 12,000 housing units. We waged a battle in the National Planning and Construction Council, at the end of which we brought about the extension of the TMA until October 2023. Today we are producing a network of alternative plans for TAMA 38, through companies that produce urban maps that mark buildings that are suitable for urban renewal and determine the building rights for them."