Few real estate deals since start of war

New construction in Rishon Lezion Credit: Shutterstock
New construction in Rishon Lezion Credit: Shutterstock

Israel's real estate market, already in a slowdown, has ground to a halt, but companies are confident sales are set to resume.

The war began when Israel's real estate market had already experienced a prolonged slowdown due to interest rate hikes and there was already a record inventory of unsold apartments. Over the last month, the slowdown has become more acute because of the war, with no end to the fighting in sight.

"Globes" spoke to real estate companies to understand what is currently happening on the market, if people are actually buying homes during the war, whether new homes are being delivered, what is happening with procedures at the authorities and whether land marketing tenders are being issued.

The fighting, said all the sources that we spoke to has led to a complete standstill in the market and a steep fall in prices. "There are zero deals," says Yaki Reisner, owner and CEO of Reisdor Yazamot. "If a person closed a deal before the war and fixed a date for signing, then the deal was officially done but it hasn't happened that there are deals now.

"From the time that a person is interested in an apartment until the final sale after lawyers and everything, the fastest process is between three to five weeks on the free market. So if we are today seeing a drizzle of deals, it's those that were closed in August and September and for which the sale is being completed.

Reisner admits that the halt in sales did not begin with the war. "Can I say that in October there were interested people coming to sales offices. No. So we ran a campaign before the holidays and we spent hundreds of thousands of shekels on digital ads and there were hundreds of leads that were due to be handled after the holidays but it was clear that we wouldn't let our marketing people make the calls at such a time and say, 'Hi about the apartment you are interested in.

"At the moment after 30 days of fighting, we are beginning to rethink and from next week we will begin to send out messages to get a feel for the situation."

Kata Group deputy CEO Oz Kata told "Globes,"At first we didn't even get back to people who left messages, because people were at funerals and in mourning. In the second week we started getting a few calls and individual inquiries and we even had one purchase. People are looking for residential apartments with security rooms, not for investment. Once moving to a new apartment was luxurious, now people feel that they are not ready to spend one more war in an unprotected apartment.

"We don't do proactive selling at all, only if you contact us. It's very little compared to what happens normally, but people do want to view. There were even a few non-residents who contacted us."

Azorim CEO Ron Avidan expects that there will be a return to sales after the war and especially in areas where there will be a "stampede for security rooms" - areas where the time to get to the protected area is short. He says, "Naturally, sales have dropped significantly. There are sales in projects in Nahariya, Beersheva and Netanya.

"All in all, we are aiming to return to activity while the war is being conducted, but it is completely clear to us that sales at a significant rate will only happen after the war is over.

"I expect that sales in Beersheva will strengthen because of the so-called 'stampede for security rooms,' the acknowledgement of the absolute importance and vitality of a protected complex inside the apartment."

Y.H. Dimri VP marketing and sales Amir Cohen says that there are few enquiries and these are mainly by people wanting to move quickly into an apartment because of the need for a security room.

"In central Israel there are a small number of purchases by those who had already begun the process. There are still no deals being cancelled but going by past experience, I assume that people are still in shock. It also depends how this ends and where it leads."

"We are a company that began in the south. The company's head office is in Netivot and we believe in the periphery, even if in recent years we have also had relatively large activities in the central region. From our perspective, the company is continuing to develop. This is in the interest of Israel and that won't change but will even strengthen after the end of the fighting."

Avida mentions that there is interest from Jews abroad but it is too early to identify a wave of purchases from them. "The matter of purchases by Jews living abroad we see but generally deals with foreign residents are slow."

Avney Derech VP marketing and sales Hanna Schwartz says, "We see growing interest in sales offices, mainly in areas such as Tel Aviv, Katzrin and Ramla. Some of the interest is from Israel and some from abroad following the growing wave of antisemitism."

Published by Globes, Israel business news - en.globes.co.il - on November 13, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

New construction in Rishon Lezion Credit: Shutterstock
New construction in Rishon Lezion Credit: Shutterstock
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