Looking for a home in Israel is difficult. The prices of homes have been declining for the past four months which is good for buyers, but you have to be able to find a property to buy first. New home sales have declined sharply, and unsold home inventory is low, fueling concerns that Israel is heading to a housing bubble.
Israel has done a lot under Finance Minister Moshe Kahlon to help control rising home prices. Investors are being pushed out of the residential market, and the government has made an effort to offer affordable housing options.
Home prices have declined 2.15% in the last four months.
Tel Aviv prices fell by 0.8%, making the city slightly more affordable.
But with a declining inventory, I can’t see the prices for housing getting much lower. Jerusalem’s drop of 7.6% in prices remains a mystery to industry insiders, and the major drop has helped add to the 2.15% overall decline in prices.
The economy remains strong, which is good for Israelis, and the OECD does predict continued economic growth. Yet the OECD also announced that there’s a severe risk of a housing bubble in 2018. A severe correction is expected to take place.
All it takes is a stroll in Haifa to see what many people are predicting might be the answer to the housing bubble. Pardes Hanna Karkur is leading the way with cafes and shops all housed in something unusual: shipping containers.
Metal containers are often used for storage, but there has been a trend that is popping up in Europe and the United States. The military has been utilizing storage containers for decades, and now it may be time for Israeli residents to change their idea of what a house is supposed to be.
Containers are very durable, and with a little welding, many containers can be joined together to offer a large dwelling. Permit times are also cut down dramatically. Less “red tape” and the ability for container homes to be made in a factory makes it easy to rapidly build.
There’s also much less risk involved for contractors during the building process. Building in a warehouse and shipping the containers to the building site eliminates much of the weather-related setbacks that builders have.
Eco-friendly and low-maintenance, container homes make sense for many communities, yet the harsh Israeli climate does post concerns. The harsh climate makes builders have to insulate against heat rather than the cold weather.
The metal walls of container homes attract the sunlight, making the interior of the container scolding hot. Adjustments need to be made to shade the containers and protect them from the sunlight.
Government initiatives in 2016 planned to add 20% to 30% to the 23,800 unsold homes on the market in January. Based off of this figure, that means the government would add up to 7,100 homes.
Despite having to meld construction methods together to protect the metal walls from the sun, container homes are still a top choice. The containers are affordable and are able to be joined quickly, so it makes perfect sense to utilize containers to help soften the housing bubble and reignite new home purchases in Israel.