Galit Ben Naïm, Senior Vice President to the Chief Economist: "Interest rates will not drop to 0.25% — apartment prices will need to adjust to purchasing power"

Galit Ben Naïm, Senior Vice President to the Chief Economist at the Ministry of Finance, noted that a drop in interest rates to 0.25% is not expected and emphasized that the purchasing power needs of households will require an adjustment in apartment prices. At TheMarker's real estate conference, she referred to the increase in the cancellation rate of new apartment purchase transactions, which reached 1.5% to 4%, and even 7% in certain cases, compared to 0.5% in 2021. Ben Naïm stated that contractors offering significant discounts manage to sell apartments quickly, while others who do not adjust apartment prices to demand are stagnating in the market. She also addressed the economic difficulties faced by buyers in the south, which affect their ability to complete purchases. Additionally, she dismissed claims regarding the volume of new apartment inventory and clarified that the situation in the second-hand market remains weak, with buyers needing to take an immediate mortgage, unlike new apartments offered with financing deals.