Why Market Reports Fall Short for Jerusalem's Anglo Market
This blog post is in response to a thought-provoking article that examines how now property developers are slow to react to market changes.
From my observations, I believe this article accurately portrays the situation in numerous cities throughout Israel.
In this blog post, I will be referring to the following Globes English article: https://en.globes.co.il/en/article-can-israels-real-estate-companies-avoid-a-crash-1001438698
Jerusalem's Anglo Communities
In my opinion, the prime areas of Jerusalem, namely Rehavia, Katamon, Baka, German Colony, and others, have a unique supply and demand dynamic that differs from other areas not mentioned in the article.
In my main sales areas, a significant proportion of the market comprises of foreign investors - and US investments now offer around 15% more return than they did at the beginning of 2022.
Regarding the article's reference to different stages of market response, it is hard to determine how many projects in Jerusalem are in the second stage, where incentives are offered, or the third stage, where prices are reduced.
However, I can confirm that in the projects I am involved in, and others I know of, there have been no such incentives or price drops. In fact, in some projects in Arnona, prices have gone up by nearly 10% in the last week, as the developers had already sold close to 50% of the project before construction even began.
In various parts of the country, the response to market conditions and sales trends differs depending on the specific project and developer. It is not uncommon for developers to adjust their pricing and incentives to boost sales in areas where demand is low.
However, in Jerusalem's prime areas, demand is still incredibly high, and I have not observed any such adjustments.
Interestingly, I have noticed that projects in Arnona and Katamon, which I am currently working on, have increased their prices by 5 to 10 percent as they are now more than 50 percent sold.
Despite the market conditions referenced in the article, there is still high demand for these units, and this is precisely my main point. The Globes article fails to acknowledge the nuances in niche areas. In my opinion, the neighborhoods I work in are not necessarily following the same trend as the broader Israeli market.
I assume that most of my blog readers would not be interested in the many other areas of Jerusalem that I am referring to when I mention the city as a whole.
Real estate markets can be highly unpredictable, and there are often exceptions to the general trends. From my experience, the Jerusalem areas where I work are currently going against the market trend.
There are several factors that can influence the real estate market, such as economic conditions, interest rates, supply and demand, and local regulations. It's essential to keep up-to-date with market information and research when considering a real estate purchase.
However, it's crucial to be cautious when relying on articles that generalize whole sectors or the entire country. If you believe that prices will drop by 10 to 20 percent, other buyers may snap up the units you were eyeing, and you may miss out on a good deal.
(This article is not data-based but rather based on CapitIL’s CEO & Co-Founder Ben Levene’s personal market experience and opinions. No decisions should be made without thorough due diligence and professional financial advice.)
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