In my last article I discussed why I believed prices will not crash in the Israeli housing market. Property will maintain value and prices slowly carry on rising.
Here I will make a devil’s advocate argument for you to consider. I have many clients who believe what is below. Two in particular in Israel have found deals they want to buy but are frozen in terms of the direction to go. They believe the market will dip 10-15 percent. I personally do not see this!
These are some arguments for a potential drop:
1. Though Israel has dealt with the coronavirus seemingly very professionally, we are not completely out of the woods. Another six-week freezing of the economy could have a big effect on the market. One blip might be manageable, but a second lockup of the economy could be much worse.
2. Many people have significantly less money to play with. If your money was in the markets it is either worth significantly less or you are leaving it in waiting for gains. Either way it doesn’t seem that this will have a positive effect on the market.
3. Builders and locals do not want to be sitting on devaluing property. This is not a very Israeli line. Previously it has not been an acceptable idea that an owner might sell low before an even worse market drop.
4. Finding financing from the bank will become a lot harder as the banks worry that repayments will not be made.
As I read the above and I look in more detail at the market, the above analysis is not something I personally am envisaging, though I can see that there may be some good deals in particular situations.
Again, I can’t predict the future, and time will tell!