Feb-Mar 2024 Real Estate Price Report
As the market and the geo political situations continue to evolve, the main factor for the recovery in prices for real estate seems to be the expectations for interest rates cuts in the next few months. Beyond the expected monetary policy loosening, the medium term trigger will be a resolution of the conflict and an appeasement on all fronts. In the meantime, prices seem to be reacting exactly how we predicted.
Detailed Analysis of Israel’s Real Estate Market Dynamics (January-February 2024)
The overall index that measures housing price changes, taking into account quality differences, went up by 0.7% in November-December 2023 compared to the previous two months. However, prices fell by 1.4% versus the same months in 2022. After many years of fast price growth, prices started decreasing around 10 months ago.
Ultra Luxury Properties Riding the Market Turbulence
Last year, the residences in Herzliya Pituah emerged victorious over Tel Aviv’s penthouses, a feat they’ve accomplished multiple times. The highest-priced residential transactions in Israel during 2022 once again demonstrated that, whilst Tel Aviv’s luxurious high-rise apartments are impressive, there’s simply no substitute for a private spacious home and garden, particularly one that overlooks the sea.
2023 Tel Aviv Real Estate:
2022 has been year of wreckoning. War, inflation, interest rates hikes and the tech wreck. Prices of literally everything have soared to levels uncharted since the 70’s petroleum embargo. What we’ve experienced is the exact reversal of the wealth effect. Until the onset of the current global turbulences, people, bolstered by the increase of the value their real estate and investment portfolios, felt richer and spent more relative to their income.
Buying a New Apartment on Plan. Important Change You Must Know.
So that’s great news for buyers who are thinking of buying an apartment from a contractor. The uncertainty regarding the final price of an apartment has been partially mitigated, especially if you’ve got 3 to 4 years to wait until delivery. We do have reservations however as this new law is not addressing the fundamental reason why apartment prices went up so much in the last couple of years and beyond. If anything this policy is at best misguided and was drafted for the sole purpose of the appeasing the the discontent.
Does a Weaker Shekel Mean More Expensive Tel Aviv Apartment Prices?
Property, like gold, are intrinsically associated to safer investments. For foreign investors, the shekel transformation into a safer asset. Notwithstanding, the relative strengthening, it is the increased stability of the currency that attracted investors. The remarkable resilience of the Shekel despite lingering political uncertainty, the looming threats from the neighboring countries and the geopolitical shifts in the region. So our argument is that foreign buyers have continued to contribute to the increase in property prices, despite (or thanks to) the emergence of the Shekel as stable currency. A weakening of the Shekel, however, may persuade those foreign buyers to step in. Our experience on the ground shows that foreign buyers are highly sensitive to currency fluctuations, but most think that the Shekel is not a bad place to be and what better than getting exposure to it through real estate.
Inflation Headaches
Why A Tightening Monetary Policy Will Have The Exact Opposite Effect On Real Estate Prices Than You’d Expect TL;DR Inflation is pernicious and harmful, but the remedies at hand could have more insidious side-effects. As the first post of a series exploring the forces at play in affecting the real estate prices in Tel Aviv, […]
