The Phoenix - Escort and Guarantees Department: Market Review
Feb 28, 2019
Article by Galit Teper, Head of the Department for Accompaniment and Warranties under the Israeli Sale Law
The year 2018 began with many question marks regarding the direction of the real estate market, mainly in light of the numerous developments related to the “Price for Residents” tenders, and the uncertainty about the program’s long-term impact on housing prices.
As expected, throughout the year we saw fluctuations in monthly sales price data, accompanied by a lack of agreement among the various entities measuring these changes.
Recently, it was reported that over the past 12 months, from December 2017 to November 2018, apartment prices fell by approximately 2.3%. Most of the decline occurred at the end of 2017 and the beginning of 2018. In other words, in recent months we have seen only a slight change, but it still provides a positive indication that prices, at the very least, have stopped rising.
Article by Galit Teper, Manager of the Sales Law Support and Guarantees Department
2018 began with many question marks regarding the direction the real estate market is heading, mainly in light of the many developments in connection with the "Price for Tenants" auctions, and the uncertainty regarding the level of impact of the program on housing prices over time.
Indeed, as expected, we saw fluctuations in sales price data on a monthly basis throughout the year, with a lack of agreement among the various parties measuring the changes.
It was recently announced that over the past 12 months, between December 2017 and November 2018, there was a decrease in apartment prices of approximately 2.3%. Most of the decrease occurred at the end of 2017 and the beginning of 2018. In other words, in recent months we have seen little change, but this is still a positive indication that prices have, at the very least, stopped rising.
Aspects related to tenant price auctions
Furthermore, there is an increase in the number of completed apartments in 2018, with the annual rate standing at approximately 51,000 units (according to data through September). For comparison, in 2017 the numbers stood at approximately 48,100 apartments, and in 2016 at approximately 46,300 apartments. This increase is leading to growth in the housing stock in Israel, and indirectly supporting a moderation in the rate of increase in rental prices.
On the other hand, we see a dramatic decrease in the volume of construction starts in the past year. A rate of about 46,000 housing units compared to no less than about 51,400 housing units in 2017 or about 55,800 in 2016.
It is no wonder, therefore, that, given the uncertainty in the industry regarding demand levels and prices, many contractors are reducing their activities.
When you cross these trends with the average increase in the number of households in Israel, which is an addition of about 50,000 new households per year, you can clearly see the gap between supply and demand. Construction starts are not covering the natural demand, and this could lead to a chain reaction of a shortage of apartments, which is expected to naturally cause prices to rise.
Supply and demand gaps
It seems that in the coming year we will also face unclear changes in apartment prices, especially in light of the uncertainty regarding the implementation of the current government's plans in the housing market on the one hand, and the upcoming election period on the other.
Disclaimer
The data detailed above is for general and concise information only, and is based on public data published in the media. The information is provided on an "As-Is" basis, without warranty or attempt to make any representation - express or implied.
The above does not constitute any indication and/or commitment regarding the state of the markets in the future, and there is no certainty that the forecasts detailed in this list, if any, will actually come true. The forecasts, if any, may certainly come true in a manner different from that expected.
The above does not constitute a substitute for investment advice from qualified parties, which is consistent with the needs of the investor, and does not replace the advice required for an investor considering taking steps towards investing in the field by a legal advisor, tax advisor, investment advisor or any other financial advisor. Investors are advised to consult with their own advisors, who will take into account the unique data of each person, and the needs at hand.
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About the Real Estate Support and Guarantees Department at The Phoenix Company
The Real Estate Support and Guarantees Department at Phoenix Investments and Finance deals with financing and supporting the construction of residential projects. The department provides its clients with a comprehensive response to all of the client's financial needs, including Sales Law policies, credit to finance land acquisition and construction costs, guarantees for landowners, and more.
The department presents rich experience in supporting and financing projects within the framework of the Lamishkan program, evacuation and construction projects, TAMA 38/2, combination transactions, and also supports dozens of projects independently while maintaining close cooperation with other financing entities in the market. The support and financing are carried out subject to the Apartment Sale Law, 5733-1973, and using the closed support method.
The Phoenix strives to be an institutional alternative for financing construction projects, while uncompromisingly adhering to strict banking standards and accompanied by leading experts and professionals in their field. Galit Teper, Manager of the Cartel Law Support and Guarantees Department: 074-7312023 galitt@fnx.co.il The Phoenix Investments and Finance Ltd.
The Real Estate Accompaniment and Guarantees Department at Phoenix Investments and Finance specializes in financing and overseeing the construction of residential projects. The department provides its clients with comprehensive solutions for all their financial needs, including Sale Law (Mechir L’mishtaken) policies, financing for land acquisition and construction costs, guarantees for landowners, and more.
The department has extensive experience in supporting and financing projects under the Mechir L’mishtaken program, urban renewal projects (Pinui-Binui), TAMA 38/2 projects, combination deals, and also independently supports dozens of projects while maintaining close cooperation with other financial players in the market. All accompaniment and financing are provided in accordance with the Israeli Sale Law (1973) and follow the closed-accompaniment method.
Phoenix aims to serve as an institutional alternative for project financing in construction, while uncompromisingly adhering to strict banking standards and providing guidance from leading experts and professionals in the field.
Contact:Galit Teper, Head of the Sale Law Accompaniment and Guarantees DepartmentPhone: +972-74-7312023Email: galitt@fnx.co.ilPhoenix Investments and Finance Ltd.
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