Kahlon lowers expectations on home price falls

Moshe Kahlon

Minister of Finance Moshe Kahlon said that apartment prices might only fall moderately.

Minister of Finance Moshe Kahlon told Galei Tzahal (Army Radio) today that there would be no substantial decrease in housing prices, and revealed that the next state-budget might be for two years, due to coalition constraints.

"We are at the height of our work on real estate prices," Kahlon remarked. "We are flooding the market with land, and are conducting buyer fixed price tenders in order to provide a solution for young couples that have never had a chance to see an apartment. I'm telling you they'll see an apartment; they'll have an apartment. The state will give them a NIS 300,000 check."

Kahlon repeated his statement at the Globes Real Estate Summit yesterday: "It takes 10 years to repair damage done in a day, and here we have damage that has accumulated from previous governments. This crisis began in 2006. My plans are underway. They are being criticized, but in contrast to the past, when they didn't manage to get plans approved, I took the authority myself, and am approving plans."

Commenting on the buyer fixed price plan, Kahlon said, "Almost 30,000 buyer fixed price housing units have purchased by contractors and marketed, and there are another 40,000 on the way."

Asked how many apartments had been delivered over the past year, Kahlon answered, "54,000. That's before hooking up to electricity (Form 4) - figures from Israel Electric Corporation (IEC) (TASE: ELEC.B22). Next year, there will be 61,000.

Asked about his opinion of forecasts by economists that a moderate drop in housing prices should be expected, not a steep one, Kahlon answered, "I think that's right. We don't want to create crises in any sector. We want a normal economy."

Does that mean that they will not fall substantially below their level during the recent elections?

Kahlon: "There are so many variables in this market. The interest rate is a variable, planning is a variable. Nothing will go back to the way it was 10 years ago. What if there's an economic crisis? Look what's happening in the world around us. I can state with certainty that young people will have the possibility of buying apartments they never thought they would."

"A two-year budget isn't economically good, but I'm committed to it in the coalition agreements, "Kahlon added. I'll try to convince and explain that government stability can also be maintained with a single-year budget. I'll conduct a professional campaign in this matter, not a political one… There isn't a single country anywhere in the world with a two-year budget. We like showing others how it's done, but not to that extent. There's only one country in the world that has done it - Israel. Countries manage trillion-dollar economies every year, and it works."

Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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