Apartment prices in Israel have flattened over the last few months due to Corona. Desperate sellers and a lack of buyers has kept prices flat. (With only one Israel to call home, downturns are unusual.) Now Israeli Banks are predicting prices will start to rise once again.
A few things will happen all at once that will drive up prices. First while some buyers have been hurt by the Coronavirus slowdown and will not come back to the market, many buyers have not been affected long term. They simply went into hibernation and there are plenty of buyers are ready to come back to the market. Then there is also the increase in demand due to worldwide Aliyah which is predicted to dramatically increase.
Second housing starts have slowed due to a slowdown in the construction industry. So while demand is coming back, the supply chain will take longer to get back to itself.
Lastly you must factor in the investors. With many markets struggling, investors wanting to get back into the market will look for real estate deals, further putting pressure on apartment prices.
This makes for pricing pressure on all fronts. On the demand side you have genuine buyers competing with investors. On the supply side, construction is slow and can’t ramp fast enough to keep up with demand. While these factors are not extreme in any way, certainly they will push the trend upward until we get back to equilibrium. While the market is not racing upwards it might be a good time to get in. Take advantage of the lull as the future is really hard to predict.
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