Kardan CEO Warns Next Israeli Real Estate Crisis Will Be Much Worse Than Current One
Amos Dabush, CEO of Kardan Real Estate, describes the current housing market situation in Israel as highly challenging but stops short of calling it a crisis. In an interview with Globes, Dabush attributes the market difficulties not primarily to interest rate hikes or the war, but to a combination of sharply reduced apartment sales, soaring construction costs, and increasingly burdensome regulations. He highlights that since the start of the year, the Israel Land Authority has almost halted land tenders, which he sees as a critical factor worsening the outlook.
Dabush explains that the real estate sector has long operated under a quasi-free market benefiting the Treasury, local authorities, and developers, creating a self-reinforcing cycle of high prices and fees that is now unsustainable. He warns that the next crisis will be far more severe due to rising construction costs, population growth pressures, and local government demands for public buildings and higher levies. Dabush criticizes the lack of coordinated management by the Israeli government over construction costs, foreign labor, and land pricing, calling the situation "unmanaged chaos."
Kardan Real Estate, valued at about 833 million shekels, is currently advancing projects totaling around 27,000 housing units, with over 19,000 in urban renewal. Dabush notes that while some price declines are visible, many developers are cautious about cutting prices due to long project timelines and uncertainty. He dismisses the possibility of sharp price drops seen in past decades, citing demographic growth and high costs as stabilizing factors.
Regarding demand, Dabush says buyers remain interested but hesitant due to economic and security uncertainties. He points to the need for uniform regulations across municipalities and criticizes the privatization of plan inspections, which has increased costs for developers without speeding approvals. Dabush also observes a growing trend of partnerships and acquisitions among developers to survive the tough market, especially in urban renewal projects.
Looking ahead, Dabush expresses cautious optimism that post-election economic stability and the end of the war could revive investment and improve the sector's outlook. However, he stresses that without better government management and policy coordination, the real estate market faces a deeper crisis ahead.
