Industry Panel Warns Israel Needs a New Housing Strategy After the Election

At a real estate conference run by Mizrahi Tefahot with Yedioth Ahronoth, senior housing and construction figures discussed how to revive Israel’s property market. Housing Ministry director general Yehuda Morgenstern said prices are no longer rising in the same way and the market is changing, arguing that the state must keep increasing supply through land tenders, housing agreements and lower land costs for contractors. “The power has moved to the buyers,” he said, adding that contractors should buy cheaper so they can also sell cheaper.

Ronny Brick, president of the Israel Builders Association, gave the sharpest criticism of government policy. He said the state is “not doing anything,” unlike during the housing cabinet period led by Moshe Kahlon and the late Avigdor Yitzhaki in 2016 to 2019. Brick warned that unless a special housing and infrastructure cabinet is created after the election, and a five-year plan is set with stability and certainty, Israel will move backward. He said many recent failures are in execution and infrastructure contractors, because the state does not pay as promised and even withholds guarantees in wartime. In his view, only security calm and professional appointments after the election could restore confidence.

Mizrahi Tefahot’s incoming mortgage division head, Avi Badalov, said demand from foreign residents is growing, driven by Israel’s strong economy as well as rising antisemitism in Western Europe and the United States. He said newcomers come in different patterns, some rent for a while, some buy a unit for emergencies, some make full aliyah and relocate their businesses, and some buy in community clusters, including entire buildings.

Attorney Elazar Bamberger, a former senior official in the Housing Ministry and the government’s urban renewal authority, said the market is still working despite heavy challenges. He welcomed the government’s approval of a northern rehabilitation plan worth hundreds of millions of shekels, but said the moment should have been used to launch a long-term, 10-year urban renewal strategy after the recent attacks on population centers. Morgenstern also said the ministry is working on a rental plan and needs one construction ministry to cut bureaucracy. Brick called for 100,000 rental homes between Gedera and Hadera at 2,500 shekels a month for 10 years for young couples. Badalov added that subsidized land, local grants, tax incentives and higher mortgage financing in peripheral areas could help attract stronger populations.