Ronit Dowek, CEO, Prosperity Real Estate
Are real-estate prices coming down? Not at all!!!
In the 68 years since the establishment of the State of Israel, 34 governments had been formed, on average once every two years.
Every time the regime changes – be it a prime minister, housing minister, or mayor – we lift our eyes up to the heavens and pray that the new position-holder will be the bearer of good news and tell us that, with the little money we have saved up, we will be able to help our children buy a small apartment and start living their lives without being outweighed by their mortgage payments, that often accompany us throughout our adult lives and determine our standard of living.
Those in power are constantly making the rules stricter, and to understand the changes, you must do your homework. I recommend getting advice from a real-estate attorney, who can tell you what you need to know and how to calculate the new tax laws – purchase tax, capital gain tax, etc.
It is commonly believed that burdening ordinary citizens with an unbearable tax load will help lower real-estate prices, and every such change is widely covered by the media, contributing only to a short-lived stagnation in the market, after which buyers and sellers come to the realization that nothing has changed, and the market goes back to the way it was. It does not solve anything to create a fictitious situation, it simply misleads the public.
Rather, dear Mr. Housing Minister! Dear Mr. Finance Minister! Do you truly believe that heavy taxes, or media coverage, will help us see property prices dropping in our lifetime? Or will that only serve to make the government money off our backs? Anyone can see that only brave, apolitical government measures can truly make a difference.
Let developers build on land designated for agricultural that has not served its purpose in decades. Many plans have been gathering dust on various city halls’ shelves for years, shackled by endless planning and registration procedures, when the only way to reach a viable solution is to flood the market with sanely-priced lands owned by the Israel Land Authority. Unfortunately, for cheap political reasons, no such progress is being made. We, the Jews, the Chosen People, have brilliant minds that have revolutionized almost every area possible. It is our genius that makes us as loved and as hated as we are. Across the world, Jewish creative people can come up with the ideas that will truly help lower property prices. Israel may be a small country, but it has plenty of land, and is endowed with first-rate brains and entrepreneurship.
Sadly, small-scale politics is preventing us all from ensuring that there will be a roof over our children’s heads, without having to worry about depressing mortgage payments.
Land prices currently form two thirds of the price of a property, and we are all sent to build our homes in the Negev if we want to live the dream and own a property of our own. And even if we do populate the Negev, why limit ourselves only to the south of Israel? There are many stretches of land across the country that the government can encourage local and foreign developers to build on, in everyone’s best interest. Is it not the state’s interest to have its citizens develop, prosper and live a high standard of living?
A nation of exile
As a nation exiled, having been through the Holocaust and various anti-Semitic traumas throughout history, we Jews believe that owning a home is the best and safest thing to do. I, too, feel the same way. But despite being an important anchor, paying a mortgage for the rest of our lives is a terrible mathematical error.
So if it is politically inconvenient to flood the market with land for construction, how about building some good quality, state-owned neighborhoods and, as in many other countries, rent properties for an unlimited period of time? This change in perception may enable the future generations to realize their housing dream, release our People from the cuffs of exile, and provide us all with a huge sense of security. The money going into the family bank account will be directed towards investments, excellent education, and a better standard of living, and in time, this will prove greatly beneficial to both the state and its inhabitants.
Heavier taxes are paid by property owners who own more than one property. These are not necessarily developers, but rather ordinary people who have saved penny to penny over the years, and, being risk-averse, prefer to buy a second property with which to help their children and ensure a solid flow of income during their retirement. Why should such people not be incentivized? At the end of the day, they can help their own children rather than becoming a burden to the state in their retirement. Certainly good minds should be put together to create a cognitive revolution in the real-estate market, impacting and improving all Israeli citizens’ standard of living.
We certainly deserve it.