Haggag Group CEO Sees Housing Market Bottom, Predicts Price Surge
Tzachi Haggag, CEO of Haggag Group, believes the Israeli real estate market has hit bottom and anticipates a significant price increase within a year. In an exclusive interview, Haggag detailed his company's strategy for navigating the current slowdown, which includes focusing on foreign buyers and expanding into international markets like Romania and Azerbaijan.
Haggag explained that while Israelis are seeking more affordable homes, foreign investors, particularly from Europe, the US, Mexico, South Africa, and Australia, are purchasing luxury properties in Tel Aviv and Jerusalem at higher prices and with less aggressive negotiation. His company has established an international division to cater to this demographic, noting significant sales, including deals worth over 20 million shekels.
The company's success, according to Haggag, stems from its ability to acquire land cheaply, enhance its value through planning and zoning changes, and maintain profitability even during sales promotions. He cited the 'Hagagim Towers' project as an example, where zoning changes increased buildable area significantly. Haggag also highlighted the company's expansion into data centers in Romania, securing exclusive rights for land acquisition and development in the sector.
Regarding the high-end market, Haggag acknowledged a shift, with a divide between properties priced under 3 million shekels and those over 5 million, while the 3-4 million shekel range faces challenges. He asserted that Haggag Group avoids the risky 20/80 payment structures common in the market, instead focusing on linear contracts with substantial initial down payments, minimizing cancellations.
Haggag also commented on the Sheva Dov area in Tel Aviv, calling it prime real estate with potential for future price increases, projecting prices could reach 120,000 shekels per square meter in good times, up from current sales around 80,000 shekels. He estimated that overall market prices have fallen by about 15% since the war, making it a buyer's market, but expects a rebound.
