Home sales in Tel Aviv fell by 65.6% (Shutterstock)

Sales of residential real estate in the Israeli market have declined significantly since Operation Al-Aqsa Flood on October 7, amid low turnout for cities within range of Palestinian resistance rockets. This came according to data issued by the Israeli Bureau of Statistics.

Sales of residential real estate in the southern city of Ashkelon fell by 78% from the monthly average, with 53 deals, recording the highest decline among Israeli cities.

Tel Aviv came in second place, as the highest Israeli city in terms of sales of its residential properties, with a decline of 65.6% with 53 residential properties.

For more than a year, Tel Aviv has been suffering from a sharp decline in the number of homes sold, due, among other things, to the high-tech crisis and high interest rates, which do not allow potential buyers to pay high prices there.

In occupied Jerusalem, 174 homes were sold, a decrease of 47% from the monthly average, the highest number of sales in terms of number since the outbreak of war between various Israeli cities.

Haifa is the second highest selling city after Jerusalem, with 148 homes sold since the start of the war, down 48.2 percent from the monthly average.

It was followed by Petah Tikva with 114 deals, down 22.4% from the monthly average, Beersheba with 84 deals, down 68.5% from the monthly average, Netanya with 78 deals, down 42.6% from the monthly average, and Holon with 63 deals, down 73.4% from the monthly average.

In Ashdod, 51 transactions were completed, down 65.8% from the monthly average, and Rishon Lezion with 45 transactions, down 68.5% from the monthly average.

According to estimates, the cessation of the war will not lead to the recovery of the housing market, as it depends on the recovery of the economy in general, which was severely damaged by the aggression on Gaza and its subsequent repercussions.

Construction worker in an Israeli (European) real estate

Paralysis of the construction sector

Since the beginning of the aggression on Gaza, the construction and real estate sector in Israel has been completely paralyzed, and work permits for Palestinians from the West Bank and Gaza Strip have been suspended until further notice, causing heavy losses to construction and real estate companies.

According to data from the Federation of Contractors Builders of the Country, there are 11,600 construction sites in Israel and about 168,232 housing units under construction, along with other infrastructure projects, with investments in the construction sector in Israel last year amounting to NIS 2.60 billion ($13 billion), equivalent to 6.<> percent of GDP.

Since the start of the war, construction and real estate companies in southern Israel have been suffering from a lack of income due to the suspension of work in construction workshops and the lack of new deals to sell apartments, amid fears of the collapse of real estate companies and a risk to the money of apartment buyers, according to a report published by the Israeli economic newspaper "Marker" last week.

In the clutches of recession

Two days ago, Chief Economist at the Israeli Ministry of Finance Shmuel Abramson predicted a decline in GDP growth by 1.4% to stabilize at 2% in 2023, due to the Israeli aggression on the Gaza Strip.

Abramson said in an economic review that the expected growth figures this year mean that Israel's economy is entering a recession, taking into account the population growth of 2% per year.

For the coming year, the report notes that "given the high degree of uncertainty regarding the fighting situation (in the Gaza Strip), several scenarios have been prepared."

In the baseline scenario on which the forecast is based, the Israeli economy will grow by 1.6 percent in 2024, which assumes that the war will continue until the first quarter of 2024.

On a "rapid recovery scenario" basis, growth next year will be 2.2%, while on a "slow recovery scenario" it will be 0.2%.

In the 2023 outlook, the chief economist asserts that "the damage to the sense of security and the slump on consumer sentiment leads to a reduction in private consumption, which is also affected by lower household income."

Private consumption growth in 2023 is expected to be only 0.1 percent, exports are expected to show a decline of 0.6 percent, while imports are expected to decline by 4.4 percent due to lower demand.

"Winning the war is important for the recovery of the economy as well," Abramson said.

Source : Al Jazeera + Agencies