Mild drop in Tel Aviv rent prices
צילום: עידו אפרתי
Realty officials: Apartment prices to drop
Survey conducted among 50 CEOs, deputy directors of leading real estate agencies reveals 14% believe flat prices will decline in central Israel by more than 20%; most believe prices will rise again in 2010
Forty-three percent of senior real estate officials believe that the prices of apartments in central Israel will drop by 10% to 20% in 2009, according to a survey conducted by the Deloitte Brightman Almagor Zohar audit and consultancy firm.
The poll, which was held among some 50 CEOs and deputy directors of leading Israeli real estate companies, also revealed that 21% of the respondents believe the prices will drop by up to 10%, and only 14% say the prices are likely to plummet by more than 20%.
However, a large majority of the respondents (74%) believe that the apartment prices will rise again in 2010.
The survey also addressed the rent prices in Tel Aviv. Only six months ago, senior real estate officials estimated that the apartment rent prices in the central city would rise, but 64% of the poll's respondents believe that they will drop by up to 15%. Eight percent say they will likely drop by more than 15%, 14% believe the prices will rise, and 14% predict no change in the rent prices in Tel Aviv.
Accountant Amitai Weber, head of Deloitte Brightman Almagor Zohar's real estate division, notes that "we can already see today that real estate companies are suffering heavy losses, and it's safe to assume that in order to survive they will be forced to drop the prices in the Israeli real estate market.
"The need to drop apartment prices stems, among other things, from the toughening of credit conditions and the reduction in mortgage funding.
"Another trend leading to a decline in real estate prices is the soaring unemployment and the feeling of uncertainty surrounding the Israeli economy and potential buyers, who will not rush to purchase apartment for high prices these days."
As for the rent prices in Tel Aviv, Weber notes that "the rise in apartment rent prices have been restrained, and a mild drop is beginning to characterize the big city as well."
