Al-Aqsa floods cause Israeli home sales to plunge economy

Residential real estate sales in Israeli market drop significantly since operation “Aqsa Flood” On October 7 last year, turnout was lower in cities within range of Palestinian resistance missiles. This is according to data released by the Israel Bureau of Statistics.

Residential real estate sales in the city of Ashkelon (South) fell 78% compared to the monthly average, with 53 transactions, recording the highest decline among Israeli cities.

In second place is Tel Aviv, which has the highest decline in residential sales in Israel, with a drop of 65.6%, with a total of 53 residential units.

Home sales in Tel Aviv have been falling sharply for more than a year due to factors including a tech crisis and high interest rates, leaving potential buyers unable to pay high prices. The war there has further reduced home sales there. The city is one of the main targets for Palestinian resistance missiles.

In occupied Jerusalem, 174 homes were sold, down 47% from the monthly average and the highest number of sales since the war broke out between Israeli cities.

Haifa ranks second and is the city with the highest sales volume after Jerusalem, with 148 homes sold since the start of the war, a 48.2% decrease from the monthly average.

It was followed by “Petah Tikva” with 114 transactions, down 22.4% from the monthly average, then Beersheba with 84 transactions, down 68.5% from the monthly average, and Netanya with 78 transactions, down by 68.5% from the monthly average. The average decrease is 42.6%, followed by Hulon. There were 63 transactions, a decrease of 73.4% compared with the monthly average.

Ashdod completed 51 transactions, a decrease of 65.8% from the monthly average; Rishon Lezion completed 45 transactions, a decrease of 68.5% from the monthly average.

It is estimated that a cessation of the war will not lead to a recovery in the housing market, as this depends on the recovery of the overall economy, which has been severely damaged by the Gaza aggression and its subsequent repercussions.

Construction industry paralyzed

Since the invasion of Gaza began, Israel’s construction and real estate sectors have been completely paralyzed and Palestinian work permits have been suspended. bank of the west andGaza Strip until further notice, causing huge losses to construction and real estate companies.

According to data from the “Balad Builders Contractors Alliance”, in addition to other infrastructure projects, there are 11,600 construction sites and approximately 168,000 housing units under construction in Israel. Last year, investment in the Israeli construction industry reached 232.2%. One billion shekels ($60 billion), equivalent to 13.6% of GDP.

Since the outbreak of the war, construction and real estate companies in southern Israel have suffered revenue losses due to the shutdown of construction workshops and the failure to reach new residential apartment sales deals, fearing bankruptcy, according to a report published by Israeli economist Markel newspaper last week. Losses to the company and threats to apartment buyer funds.

Under the clutches of economic recession

Two days ago, Shmuel Abramson, chief economist at the Israeli Finance Ministry, hinted at a slowdown in economic growth gross domestic product Growth of 1.4% due to Israeli aggression in the Gaza Strip will stabilize at 2% in 2023.

Abramson said in an economic commentary that this year’s expected growth figures mean the Israeli economy will enter a recession, taking into account an annual population growth rate of 2%.

Regarding the year ahead, the report noted that “given the high degree of uncertainty about the fighting situation (in the Gaza Strip), several scenarios have been prepared.”

In the base case on which the forecast is based, the economy will grow Israel’s growth rate in 2024 is 1.6%. This scenario assumes that the war will continue until the first quarter of 2024.

Growth next year would be 2.2% under the “fast recovery scenario” and 0.2% under the “slow recovery scenario.”

In his forecast for 2023, the chief economist asserted that “an impaired sense of security and low consumer morale have led to a reduction in private consumption, which is also affected by falling household incomes.”

Private consumption growth is expected to be only 0.1% in 2023, exports are expected to fall by 0.6%, while imports are expected to fall by 4.4% due to lower demand.

“Winning the war was also important for economic recovery,” Abramson said.