73% of the adult Hebrew-speaking population in Israel does not believe that home prices will fall in the next two years, according to the Home Prices Survey, conducted last week by Sarid Research Services for the Guy Farbman Law Office. The survey included 506 respondents over the age of 18.
The survey sought to examine the public’s attitudes on aspects of the effort to lower home prices, by asking four questions. The first question, “In your opinion, will the Israeli government succeed in lowering home prices in the next two years?” As mentioned, 73% of respondents said that home prices will not fall, 12% believe that home prices will fall in the next two years, and 15% said that they did not know. A breakdown by segments found the most skeptical people defined themselves as secular: 80% of them believe that home prices will not fall in the next two years. The breakdown of responses by area of residence found that 77% of the residents of metropolitan Tel Aviv said that the government would be unable to lower home prices.
In response to the second question, “Do you plan to buy a home for residence or investment in the next five years?” 42% of the respondents said that they planned to buy a home, 32% of the respondents said that they did not plan to buy a home, and 26% said that they did not know or had not decided. A breakdown of the responses by sector found that 46% of male respondents said that they planned to buy a home, compared with 39% of women. A breakdown of respondents by religiosity found that 62% of haredi (ultra-orthodox) respondents said that they planned to buy a home for residence or investment in the next five years. This figure is 18-22% higher compared with respondents who defined themselves as religious, traditional, or secular.
Two additional questions were intended to examine the respondents’ attitudes toward reports in the media about measures that the minister of finance plans to take, including rent control, a higher purchase tax on new homes, and bringing in 20,000 Chinese construction workers to expedite construction and lower building costs.
In response to the question, “Will bringing in 20,000 Chinese construction workers to expedite construction and lower building costs, and will raising the purchase tax on new homes help lower home prices in the coming years?” 44% of respondents said no, 29% of respondents said that the plan would help lower home prices, and 27% said that they did not know. Responses to this question also showed differences between sectors: 49% of secular respondents said that the plan would not help lower home prices, and just 24% of respondents said that it would help lower prices. Among haredi (ultra-orthodox) respondents, 43% said that they believe that the plan would help lower home prices, compared with 17% who said that it would not help.
To the question, “Will rent control and raising the purchase tax on new homes help lower home prices?” 57% said no, and just 13% said yes. Here too, secular respondents stood out: 65% of them believe that these measures will not help lower home prices.
Commenting on the figures, Adv. Guy Farbman, an expert on real estate and managing partner in one of Israel’s top urban renewal law firms said. “For me, the interesting question of the survey was the second question, which examined the public’s intent to buy a home in the next five years. Analysis of demand statements for a period of one year, shows a fourfold or greater demand compared with the actual number of apartments sold in the past three years (2012-2014). In this situation, the public is right: the majority does not see lower prices on the horizon.”
Responding to the real estate reforms that Minister of Finance Moshe Kahlon is drawing up, Adv. Farbman said, “The big problem in the residential real estate market in Israel is a problem of supply, and it seems that the minister of finance understands that it is necessary to increase the housing supply in Israel, and fast. This is why approval to bring in 20,000 Chinese workers is an important step that will help developers in Israel build more and fast. Another problem that must be tackled is to remove bureaucratic barriers which impede the issuing of building permits in Israel. Municipal authorities in Israel delay building permits and drag out the issuing of permits in a way that severely harms developers and the people who ultimately pay the price are young couples in Israel who are unable to buy a home at a reasonable price.”
Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2015
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