Finance Minister Moshe Kahlon.
(photo credit: MARC ISRAEL SELLEM)
Finance Minister Moshe Kahlon presented an avalanche of policy proposals on Sunday to boost supply in the real-estate market and bring down house prices, including a plan to invite foreign construction companies to operate in Israel.
The plan, which the housing cabinet will take up on Monday, would select six foreign companies and give them access to the Israeli market over the course of five years.
The foreign companies, which will be able to cooperate with local companies, will be allowed to obtain 1,000 visas for foreign workers for their projects.
The hope is that foreign companies will shake up the competition among Israeli construction companies, and introduce the more technologically advanced building methods that have been absent from the sector.
Unsurprisingly, Eldad Nitzan, the chief of the foreign construction workers’ union in the Federation of Israeli Chambers of Commerce, came out against the plan, saying it would be a blow to Israeli employees.
“The program to bring foreign companies here is a death sentence to Israelis working in the sector,” Nitzan said, adding that the plan would not affect prices.
Kahlon said he intends to get 145,000 residential units planned in 2016, including 5,000 targeted at underserved minority communities.
“As we promised, we are continuing efforts to expand the supply of housing units and presenting ambitious planning goals. We are planning the future today in order to bring down prices out of concern for the country and our children’s futures,” he said.
Earlier in the day, the cabinet approved a plan to introduce a new kind of retirement savings account, which could also have implications for the real-estate market. The new plan would allow savers, under certain circumstances, to withdraw their money without having to pay a capital gains tax. That could help families looking to access large chunks of cash needed for down payments.
“The greatest reform that we in the cabinet could enact is to reduce the regulatory burden on doing business in Israel and on the government administration,” Prime Minister Benjamin Netanyahu said at the cabinet meeting regarding the new rules that will enable the fund.
Also on Sunday, the names of the 196 winners in the first lottery for discounted apartments in Kahlon’s signature “price for occupants” program were announced. The lucky eligible buyers will be able to purchase four-room apartments at NIS 1.1 million and five-room apartments for NIS 1.3m.