Tadmor CEO Uri Levin Says Israeli Home Prices Fell 20% Over Four Years Amid Market Challenges
Uri Levin, CEO of Tadmor, stated at EY Israel's annual real estate conference in Tel Aviv that Israeli home prices have effectively dropped by 20% over the past four years. He explained that financing schemes and widespread benefits obscure this decline in official statistics, which dampens the psychological impact on the market. Levin emphasized that demand remains the main driver in the sector.
Levin described the Israeli real estate market as one of the strongest globally despite facing one of its most challenging periods. He noted significant disruptions following the October 7 events, including construction halts and labor shortages due to restrictions on Palestinian workers entering Israel. Although the workforce quantity has stabilized, the quality remains insufficient, particularly in the execution phase of construction projects. Levin expressed cautious optimism about this segment, highlighting ongoing infrastructure projects like the metro and data centers that sustain demand.
The office market, however, faces greater difficulties, with many buildings in Tel Aviv remaining vacant for extended periods. Levin advised that construction should continue only if companies can afford potential vacancies lasting years. He pointed to the rise of Israeli tech firms as a positive factor that could influence office space demand. Recent signs indicate a recovery beginning in Tel Aviv's office market.
Levin forecasted a prolonged period of complexity for the sales market, with peripheral areas seeing more sales activity than others. He predicted interest rates will remain high for the foreseeable future, urging the industry to adapt to a new reality of sustained elevated borrowing costs. Levin advised real estate companies to reduce reliance on banks, lower leverage, and convert asset portfolios into profitable holdings to weather the ongoing crisis independently.
He concluded by expressing hope for positive changes from potential political developments, such as a Saudi Arabia agreement or upcoming elections, but stressed the importance of preparing for the worst-case scenario.
