Kahalon’s Surprise: “There are 30 Thousand Empty Apartments”

Kahalon surprises everyone with his claim: “There are 30 thousand apartments that the contractors are selling, he tells Channel 10.

In an interview with Channel 10, Treasurer Moshe Kahalon said there is sufficient land available on the market; however, certain parties continue to blow up a huge bubble. “It’s a bubble that ‘was inflated by contractors, entrepreneurs and bankers, and it’s going to burst.

“The price of apartments is going to go down, and those who have invested in real estate are going to be the first victims,” he added. “I think that this bubble is going to burst. I don’t know how much it will deflate, for there is no shortage of apartments. Today there are 30 thousand apartments that the contractors aren’t selling and investors have stopped buying. Young couples don’t want to buy, either. People are artificially inflating this bubble.”

According to Treasury statistics, the cost of building an apartment has doubled in the last two decades. Daniela Paz, director of Paz Economics and Engineering, spoke about works done by her company for the housing branch of the Treasury concerning the costs of apartments in Israel. She claims that, "The cost of ‘manufacture’ of an apartment has doubled in real terms from 800,000 shekel in 1990 to 1.6 million shekel currently. The Z generation consists of some 3 million young people, and children. Starting from the year 2020 they will need 1.5 million homes. Today Israel is building merely some 40,000 a year.”

Forecasting the future prices of apartments in Israel, Paz said, “The trend of existing apartment prices will go down. The introduction of new technology as well as better use of existing resources will lower the cost of housing in Israel. Bureaucratic demands are also being lessened.”

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