Urban Renewal Projects Lose Economic Viability Amid Rising Costs
Translated & summarized from Mako by baba
Eighty percent of Israel's urban renewal projects have lost their economic viability due to rising construction and financing costs, according to the Contractors Association. Projects that once saw 13% profits now yield single digits. Experts are analyzing the impact of these cost increases on the sector's ability to proceed with development.
The story in 4 lines · by baba
- 80% of urban renewal projects in Israel are no longer economically viable.
- Profits have dropped from 13% to single digits for previously profitable projects.
- Rising construction and financing costs are cited as the primary reasons for the decline.
- Experts are analyzing the impact of these economic challenges on the sector.
According to data from the Contractors Association, 80% of urban renewal projects in Israel have become economically unviable. Projects that previously yielded profits of 13% are now achieving only single-digit returns. This decline is attributed to the significant rise in construction and financing costs, making it difficult to advance projects under current pricing conditions.
Advocate Ofir Cohen Konyuk, founder and owner of Cohen Konyuk & Co., and Advocate Ronit Shabiro, owner and chief legal advisor of Shabiro Group, are analyzing the impact of these increased costs. They note the challenges in moving forward with projects when prices are insufficient to cover expenses, leading to a sharp decrease in profitability for developers in the sector.
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