Decrease in housing supply under tax pressure;
The production cycle was 3,333% less than "need".
Builders: construction tax swallows the "capital principle".
Expect the housing market:
1 The combination of 4 political and economic shocks in the last year and a half.
She lowered the rate of housing construction in Israel to two thirds of the "estimated market need".
2 Last year, the distribution of housing production in all cities decreased by 25% compared to 1,403 and reached the level of 392 thousand housing units.
3 This spring, the number of residential units that builders "started to build" by obtaining permits from the municipalities decreased by 13% compared to the spring of last year.
and reached 95 thousand units.
4 "Housing market need for new supply" at least in the next ten years.
According to estimates, the annual figure is about 590 thousand units.
5 In this way, what was built in the cities during the 5 seasons leading up to the beginning of this summer, is about 33% lower than the "market need".
6 During this period, on average, housing production was at least 20% lower compared to the corresponding season last year.
4 reasons for the contraction of the housing construction market.
Imposing taxes on the construction market.
◀ Builders see the effect of a "housing construction and sales tax" as a "capital termite of the construction industry", because of the "formula of how to get", instead of being applied to part of the profit tension of the construction, it is aimed at the principle of their capital.
◀ The construction tax is collected in 2 stages, in the first stage it is calculated and is equal to 10% of the regional price of the property, and after several years, in the final stage, it is equivalent to 25% of the builder's profit.
However, due to the spike in apartment prices in recent years, the "delay in calculating the final tax" means that "the tax base will be at the level of the current price several times higher than the price at the time of the contractor's sale", as a result, the builders' payment for this tax exceeds the "earned profit" at the time of the sale of the units.
Inflation in production/.
◀ From the point of view of construction investors in the last year, the continuous growth in the price of building materials at a steep incline has put the "main brake" on housing production.
Last year the construction price increased by more than 60% and the spring increased by 107%.
2 wars in one year.
◀ Only in the 5 seasons when construction was reduced, the country witnessed 2 wars; 12 day war and 40 day war.