It seems like Covid19 is changing how we look upon our housing environment. People believe that from now on, they will spend more time at home with their loved ones while implementing new work habits into their domestic space. Furthermore, many young Israelis are tired of waiting for prices to drop, and while watching yet another government policy going down to the drain, their coming back to the market and kicking the new apartment sales back up. A short review upon the Israeli real estate market teaches that high demand is here to stay. The abnormal volatility of financial markets worldwide makes real estate a solid ground for a safe investment, especially in Israel, where demand is continuously booming. Another reason for investors’ preference for the
residential real estate market stems from a lack of uncertainty about the commercial real estate market. Until recently, many of them devoted resources to purchasing new offices, but the new work culture derived from the spread of the virus is forcing them to give up this investment channel and return to a familiar and well-known haven. While the local government tried to cool prices down by adding taxes, real estate developers reacted by lowering new projects number, maintaining high demand that kept prices at their high level. Funding issues are on the line as well. Before the corona entered our lives, investors and real estate developers enjoyed low-interest rates. When everyone realized that covid19 is here to stay, banks worldwide were deeply concerned
about their debt due to increasing unemployment numbers and changed their policy & rates to defend their position. Central banks pure billions of dollars into the market, calming the loaner’s concern and creating, yet again, a safe business environment. According to data from the Bank of Israel, the local real estate industry constitutes about 6% of domestic GDP. It is considered one of the primary growth engines of the local economy. The reduction of taxation, the provision of favorable credit, and the cancellation of the unsuccessful government housing program boost Israel’s housing market and create an essential income source for the state in an era of economic uncertainty.