The housing market will remain relatively stable despite the coronavirus crisis while hotels are the real estate sector that will take the biggest hit according to a survey by the Real Estate Appraisers Association in Israel, which encompassed 200 appraisers.
Appraisers say that they are finding it difficult to evaluate real estate prices at the moment because currently there are very few deals being closed while it may not be relevant to take into account pre-coronavirus crisis prices.
42% of the 200 appraisers surveyed felt there will be no fall in housing prices whatsoever, while 41% see a price reduction of 5%. However, 65% of appraisers see a price reduction of up to 15% on quick deals, which has often been an acceptable discount in the past (for example sales because of bankruptcy and receivership).
Regarding the luxury housing market, which in the past has always been a volatile and unstable market, the appraisers see much sharper falls. 33% of those asked see a 5% fall in prices, and 46% expect a 10%-15% fall in prices. 17% of appraisers see a 25% cut in prices for quick deals.
In the office leasing market, 85% of the appraisers see a 5%-15% fall in rents. In the open space co-working office sector almost 40% of the appraisers see a 10% fall in rents and 36% see a 5%-15% - a figure similar to the mainstream office sector.
In the hotel sector over 80% of the appraisers see a 10%-20% fall in value and 87% see a 20%-30% fall in value for quick deals. In the tzimmer (country lodge) sector, 70% of the appraisers see a 10%-20% fall in value.
In the shopping mall sector 38% of appraisers see a 10% fall in price while 43% see a 20% fall.
The most stable sector according to the appraisers is the industrial-logistics sector where 56% of appraisers see no price change, although 67% see a 15% fall in price for quick deals.
The authors of the survey Real Estate Appraisers Association in Israel chairman Haim Mesilati and Yariv Drori, chairman of the Market Research and Surveys Committee wrote, "There is no doubt that we are in a very challenging period and we see that many real estate sectors will be hit by price falls. The economic situation we see will cause no few people and companies to sell properties in quick deals in order to increase cash flow and this can create real estate opportunities."
They added, "The residential sector, remains relatively stable and if we see falls at all they will be slight."
Published by Globes, Israel business news - en.globes.co.il - on June 15, 2020
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