Despite persistent rumors of falling prices in real estate in Israel everything seems to lead to a new price surge in a very short time.

Many newspapers provide shocking articles in the direction of lower prices (see our previous posts in our blog), as well as measures taken by the government however is this really the case?

What could justify the belief in a fall in real estate prices is that the figures show a decline in sales in the peripheries as well as for exceptional luxury goods. This slowdown also affects goods in high demand areas, but to a lesser extent.

It is possible to estimate this decrease at 10 - 20%. We can analyze this data by the fact that housing starts fell due to a slowdown in sales of first-hand goods; which would be a direct consequence of the operation of "targeted prices".

It is therefore inaccurate to speak of a decline as such, this is mainly a stagnation of the real estate market.

The question is nowWhen will the new price spike reach us? Is it in months or years?

Indeed, the demand remains extremely strong for a small country like Israel by an exponential birth rate, a favorable immigration policy, an increase of divorces etc ...  and all that with an offer that it remains almost unchanged.

Many expect the election period to witness a drop in prices however many of those who are waiting understand that during this period of withdrawal they have not become landowners and they can not guarantee the electoral program as well as the Government's future housing policy. This could have the opposite effect ie a rush to real estate once this achievement made after the election period and therefore an increase in prices.

The only logical solution would be to increase the supply of real estate, to build on uninhabited land, whether in the center of the country or in areas with high demand. Considering that the population and therefore the demand does not stop increasing it would also be necessary to develop the peripheries of the big cities and also the projects of Tama38 (total renovation of a building as well as the addition of floors).

The targeted price solution put in place by the government would only be one way of repelling the problem without attacking its root. It will then be necessary to watch out for the harmful side effects, namely a sharp and rapid increase in prices.

This can not make us think that in 2015 when the government in place at the time had implemented the action "0 VAT", we could witness a similar scenario ie a stagnation of prices first month to then have a record increase in real estate prices of 8% in not even 6 months. We can unfortunately learn from past experiences and it seems that all the circumstances lead us to a similar scenario.

In conclusion, the utopian decline in prices that everyone expects will not happen soon on the contrary, so it is time to buy real estate in Israel before prices are blazing.