Micah Klein (photo by Shiran Carmel)
The main fear in the capital market is about sliding into a crisis in the real estate industry. The real estate industry is saturated with capital and saturated with workers, and hence its sliding into a crisis will shock the economy. This concern stems primarily from the increase in interest rates, which makes it difficult for buyers to meet the underwriting conditions of the banks, conditions that are becoming more and more difficult mainly due to the increasing interest rates.
We won’t say too much about the effect of interest rates on apartment buyers, but initial data from Africa Residential, one of the main contracting companies in the local real estate world, reveal that the sale of apartments in the fourth quarter of this year was much better than the sales in the third quarter, which is an interesting signal for the publication of the financial statements in the near future.
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If so, Africa Housing data shows that the company sold 185 housing units during the fourth quarter, a volume of sales that is approximately 55.5% higher than the sales in the third quarter of the year. The financial scope of the sales amounts to approximately NIS 567 million.
Africa Residences currently has 39 additional units in stock, with a financial scope of approximately NIS 157 million, for which purchase applications have been signed and the company is working to complete the sales agreements for these apartments.
As of the end of the third quarter of 2022, the company has 2,516 units in various stages of marketing, of which 1,818 units have been sold, with a financial volume of over NIS 3.5 billion (the company’s share). The company sold all the apartments whose construction ends in 2023, about 80% of the stock of apartments whose construction ends in 2024 and about 45% of the stock whose construction ends in 2025.
Micha Klein, CEO of Africa Israel Magorim: “The figures indicate the continuation of the company’s growth trend. Despite the challenging period and the uncertainty that characterizes the markets today, most of the company’s inventory, the construction of which is being completed and will be handed over to tenants in the next two years, is already sold.
“The Sabion neighborhoods brand, from Africa Israel Residences, which was built on excellent construction quality, meeting delivery deadlines and financial strength of the company, along with the layout of the projects in attractive locations with high demand, greatly strengthened the sale of apartments during this period. The lands of the projects where the apartments were sold, located In the heart of the demand areas, they were purchased at attractive prices and the fact that the company reduced the scope of leverage by hundreds of millions of shekels in recent years, along with the ability to raise financing at comfortable interest rates, made it easier for the company to find a suitable solution for each buyer.
“The aforementioned strengths, together with an attractive inventory of apartments and projects in various stages of planning in the scope of approximately 11,000 apartments in strategic areas with strong and stable demand, which include the cities of Tel Aviv, Herzliya, Nesher, Netanya, Givat Shmuel and Jerusalem, are a solid foundation For the continued growth, sales and development of Africa Residential”.
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