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Banks (Finance)

Israel Announces NIS 200 Million Plan for Residential Real Estate Industry

Strategic Insights

— 1 min read

The Israeli government, led by Minister of Finance Ronnie Bar-On, has unveiled a NIS 200 million plan to stimulate the residential real estate industry. The plan, formulated by officials from the Ministry of Finance, Ministry of Housing and Construction, Israel Tax Authority, and Israel Land Administration (ILA), aims to provide banks with guarantees to help contractors meet equity requirements for loans. This move is part of the Ministry of Finance's economic stimulus package, aimed at boosting new housing starts and reducing red tape in the industry.

Key Takeaways:

  • The plan provides NIS 200 million in guarantees to help contractors meet equity requirements for loans for new housing projects.
  • The guarantees will be used to stimulate new housing starts, and the Ministry of Finance may consider increasing the guarantees to NIS 500 million, which would stimulate the construction of 6,000 housing units.
  • A joint team from the Ministries of Finance and Housing will oversee the granting of the guarantees and write an agreement between the state and the banks providing loans for housing projects.
  • The Ministry of Finance will also promote a decision by the ILA Council to abolish permit fees for exploiting building rights for residential construction, which will reduce red tape and make housing construction more available and worthwhile.
  • The residential construction industry turnover is estimated to be NIS 20-24 billion a year, with credit to the industry amounting to NIS 14-17 billion.
  • The industry employs 200,000 people, and housing accounts for 20 percent of the Consumer Price Index (CPI).

Statistics:

  • NIS 200 million: The amount of guarantees provided by the Ministry of Finance to help contractors meet equity requirements for loans.
  • NIS 500 million: The amount of guarantees that the Ministry of Finance may consider increasing to stimulate the construction of 6,000 housing units.
  • NIS 20-24 billion: The estimated turnover of the residential construction industry per year.
  • NIS 14-17 billion: The estimated credit to the industry per year.
  • 200,000 people: The number of people employed in the residential construction industry.
  • 20 percent: The percentage of the CPI accounted for by housing.

Sources:

  • "Israel Announces NIS 200 Million Plan for Residential Real Estate Industry" by Globes
  • "Globes" (newspaper)
  • McClatchy-Tribune Information Services
  • The Permissions Group Inc.

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