24 July 12 18:28–9,702 contractors are registered with the Ministry of Housing and Construction’s builders’ registry. Hundreds of contractors are working to build tens of thousands of apartments throughout Israel. More than 100 real estate development and construction companies are currently listed on the Tel Aviv Stock Exchange (TASE), and in cities like Yavne and Netanya there is intense competition as dozens of contractors meet head on.
Consequently, the novel solution proposed today by the government to import contractors from abroad to build homes in Israel because, “If there is not enough competition to bring down prices the government needs to produce it,” first and foremost horrifies us.
We have enough contractors and developers. In the field of construction, the largest Israeli contractors report near zero profitability (about 3% net profit) and it is hard to see many foreign companies rushing over here to build with that sort of profitability. The feeling at the moment is that the government arsenal is simply empty in dealing with the real problems of Israel’s real estate sector – the monopoly of the Israel Land Administration, red tape in the planning institutions and the indecision on whether to wait or not on reform, the duopoly of the large banks providing real estate credit, the tax distortions in the sector and more. So instead the government decided to launch lead balloons. They’ll soon again be suggesting that we live on new islands that they’ll produce off the coast of Tel Aviv…Read More>>