Capitol Real Estate Sitting here in Jerusalem on a Friday morning I have so many unanswered questions and know that so many questions will never be answered.
How did all this coronavirus infection really start? How is it that Israel still does not have an emergency government? What support will the middle class be receiving in all this and how can minyanim still be rumored to be going on? Why does the world never learn?
This article won’t answer any of those questions but will put the writer’s current thinking into perspective. For those of you who do not know me I sell real estate in Jerusalem and have done so for nearly 10 years.
I have never seen the market in my insular areas drop significantly in my time in the business, even during troubled times such as the infatidas. This leads me to my argument that in areas such as German Colony, Bakka and Rehavia I do not envisage property prices dropping. I might be wrong and I don’t have a crystal ball, but I actually think for a short period it will now become a buyer’s market. Let’s examine why.
To clarify, I have not contradicted myself. A buyer’s market does not mean market prices drop. It means individuals or developers want to do quick, individual deals. Wait too long and I think you will have missed the boat. Prices will start rising. This writer believes signs of rising prices were already present before the coronavirus. These are:
1. Extreme lack of supply in the Anglo areas. In regard to apartments for holiday homes or potential moves from America to Jerusalem, the options on offer are extremely limited. Therefore, the majority of sellers just won’t sell in uncertain times unless they get close to their asking price.
2. Banks are very tough in Israel. Obtaining financing was not easy before this situation and therefore not many people are over leveraged in the market—again a key reason sellers will wait it out.
3. Developers, when guaranteed by the bank, can only sell when the bank sanctions the contract as the bank ensures the developer has independent valuations done of the units. In other words, and the bank has to approve transactions, again a likely sign that they will wait it out till the buyers are willing to return to the market.
The coronavirus is no small thing and it is not yet finished. It will finish, however, and I think big world situations like this make people put the big things in the picture. I strongly believe it will lead to many more people buying a home or moving to Israel.
Investing in bricks and mortar can be seen as a reliable long-term investment strategy based on historical long term growth.
In my opinion the Jerusalem property market is going to be quiet with occasional decent deals for the buyer. The sooner the uncertainty ends the sooner I believe the market will start moving up. Of course there is a whole argument against prices rising, which will be in my next article.
Wishing everyone a weekend of peace, health and family time!
Ben Levene is owner of CapitIL Real Estate. He can be contacted at +972538224336 or [email protected].
Visit www.capitil.com.
