The real estate market in Israel is facing significant challenges, with developers in a tough position holding an inventory of 84,000 apartments, while construction and mortgage costs continue to rise. Since October 2023, construction costs have increased by 10.8%, leading developers to offer discounts and promotions to attract buyers. On the other hand, potential homebuyers feel that time is on their side, but they are encountering significant rent increases, which have surged by 10% since the start of the war, making it difficult for them to save for a home purchase.
This situation is creating a stagnation in the market, with buyers preferring to wait in hopes of price drops, while developers are forced to deal with declining demand. There is a sense of uncertainty about the future, especially in light of the upcoming elections and their impact on market stability. Many investors and potential buyers are considering their options, and forecasts indicate possible price declines in the real estate market if the current situation continues.