15 facts on Israeli real estate in Corona-times

  1. Residential rental prices, in the center of Israel, are experiencing a slight decline but are expected to rise sharply in the coming year.
  2. Mechir Le’Mishtaken, the Government’s housing program offering first-time buyers discounts between 200-400,000 NIS on new apartments, has been cancelled.
  3. A new program for young couples has been initiated, however only for those purchasing in Israel’s periphery.
  4. A rise in housing price is expected in the center of the country due to low supply and high demand, as a result of the cancellation of discounted homes for young couples in these areas.
  5. Signs of abandonment of traditional office market space toward untraditional alternatives have been noticed.
  6. Huge losses have been experienced in the hotel industry due to temporary closure and non-operation of most hotels.
  7. The phasing out of TAMA 38 and its premature cancellation by most local authorities and moving forward to evacuation-construction projects that will create many more apartments in the market .
  8. Advancement of a new law to lower the percentage of resident consent required for TAMA 38/2 projects and evacuation-construction from 80% to 66% of residents, with the aim of jump-starting stuck transactions and increasing the number of new apartments in the housing market.
  9. Collaboration on symbolic agreements for urban renewal projects aimed at standardizing and simplifying the process.
  10. Creation of new regulations on ethical matters, including limiting legal fees, in urban renewal.
  11. Reduction in density multipliers in the center cities to the lack of economic viability for the municipalities.
  12. Determination by the Ministry of Housing that delay in the delivery of new apartments for up to 40 days (due to COVID-19) will not obligate contractors to compensate buyers.
  13. Several banks have offered deferred mortgage payments, but with interest accumulating.
  14. Demand levels for purchasing apartments have fallen by around 50%, creating inertia in the market.
  15. Voices in the real estate market are calling for a reduction in purchase tax (Mas Rechisha) for investors (i.e. buyers of a second apartment or more) to stimulate the volume of transactions in the market.

The contents of this article are designed to provide the reader with general information and not to serve as legal or other professional advice for a particular transaction. Readers are advised to obtain advice from qualified professionals prior to entering into any transaction.