2023-12-03 17:47:00
Banking Sector Concerned About Decline in Real Estate Market
In management meetings of major banks Leumi and Poalim, concern about the state of the local real estate market has been expressed. While not reaching levels of panic or anxiety, bank managers have revealed their estimation that apartment prices have fallen. This concern comes at a time when the market has previously ignored price drops and relied on data from the Central Bureau of Statistics (CBS) which has a delay of two and a half months and does not tell the whole story.
Leumi’s management believes that apartment prices have already fallen and is cautious about the medium to long-term future, while Poalim does not make specific estimations but believes that price drops will increase. These concerns are significant as they come directly from the bank’s management, who are more closely connected to the market and have access to critical information and tests.
Mizrahi Tefahot and International banks, while acknowledging the risks in the real estate market, do not provide forward forecasts regarding apartment prices. Despite large exposure to the mortgage sector, they are not providing forward assessments regarding the direction in the field of apartments and mortgages. Additionally, concerns about increased risk in the construction and real estate industry have been expressed due to the war and a potential slowdown in construction progress.
Discount Bank also acknowledges the increased risk in the construction and real estate industries to which the financial system is particularly exposed, but is not showing major concern as the bank is exposed to the real estate market in what it presents as a standard-reasonable manner.
These concerns from leading banks in Israel reflect a significant shift in sentiment regarding the real estate market, with various issues contributing to a cautious outlook for the future. The impact of potential further price drops and other risks associated with the construction and real estate industry remain at the forefront of banking management’s attention.
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