Property business as usual?

Foreigner's guide to property market: Real estate expert Lyle Plocher looks at how the market is recovering after this summer's tent protests.

By LYLE PLOCHER
November 2, 2011 14:42
2 minute read.
Talpiot neighborhood in Jerusalem.

Talpiot 521. (photo credit: Courtesy)

 
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It's been nearly four months since what we might call a normal real estate market has been in play in Israel. What do I mean by normal? A real estate market where the normal market forces of "supply and demand", dictate the buying and selling activity, prices, etc.

Recent extenuating circumstances

Events in Israel and around the world over the course of the last four months have kept a lot of potential buyers out of the Israel real estate market. Many who were considering a property purchase, watched events unfold from the sidelines with bated breath. In Mid-July and throughout all of August, the tent protests which swept across Israel, had a dampening effect on potential buyer plans, then September rolled around and many people both inside and outside of Israel were pre-occupied with the Palestinian threat to seek statehood recognition at the UN. No sooner had that whole crisis passed when it was time for Rosh Hashana, Yom Kippur and the recently concluded Succot holidays.

What happened to the market during the quiet period?

During this rather extraordinary period of time, there has been a great deal of speculation in the press and lots of discussion by industry leaders and government officials about the direction real estate prices in Israel may take. The discussions and public discourse has included extensive review and debate in the Knesset regarding the government’s role in keeping real estate ownership within reach of as many people as possible.

While sales volume has definitely dropped significantly during this period of time, prices do not seem to have dropped significantly. Actually, a rather surprising statistic was just recently released by the Central Bureau of Statistics stating that real estate prices in August of this year were actually up 0.8 percent over the previous month.


So what’s next for Israel’s real estate market?

So what's the real story with the Israel Real Estate market at this point? Will prices drop dramatically any time soon? Obviously nobody can answer this question with certainty. It seems unlikely though that whatever happens will be extreme as there is just too much demand for real estate in the world’s only Jewish state. My guess is many of those who have been on the sidelines will cautiously resume their property search and that it won't be long before the "market forces" of supply and demand will once again dictate prices.
  
Lyle Plocher is the Director of Buy Property In Israel and can be reached by email at lyle@buypropertyinisrael.com.

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