Globes, Eric Mirowski, 02.07.2020

The apartments are expensive? This is not the time to address the issue. The Minister of Housing wants to subsidize housing in the periphery? Who would. At a press conference held by Finance Minister Yisrael Katz yesterday, he defined the new reality in a few words, to which he believes the real estate industry should return: without costly plans worth billions, and in fact - no housing plans at all. Instead, Katz introduced a series of concrete laws and objectives that he wants to achieve in the industry. Presumably, the Housing Ministry did not like things very much.

The press conference yesterday was particularly noticeable in light of a letter of protest written by Minister of Construction and Housing Yaakov Litzman yesterday, in which he complained that the treasury did not share his office officials with their construction and development plans, and even detailed a kind of own housing plan, Mortgages. Kat did not address these things, but from the things he said, one can also understand what he is deceiving.

"We intend to transform construction, infrastructure and high-tech into growth engines. Of the institutional funds that hold NIS 1.9 trillion invested abroad, NIS 100 billion will be invested in infrastructure and NIS 50 billion in high-tech. We will transform the area of ​​urban renewal and construction into growth levers, and invest in vocational training for those workers who will be laid off, "he said, thus placing the things that matter to him on the table: urban construction and renewal, infrastructure, high-tech.

At Litzman, the urban renewal of which Katz emphasized was hardly mentioned in section 14 and the last of his collection of principles in the housing sector.

And what about rising house prices and young couples? Katz briefly cut the issue: First, the cost to the resident is dead. Not just as a plan, but as a concept. "We want to encourage construction everywhere, and as much as possible. The problem of raising housing prices is less relevant today, "he said, citing a decade of failed attempts to lower housing prices , under the banner of assisting young couples. In the past, Katz rarely addressed the housing issue and never seemed to bother him too much. - Probably not now, when everything weighed in the public coffers was burning.

The second statement that Katz said is that he supports the return of real estate investors to the market, thus suggesting that in a situation of recession economy, rising unemployment and high housing prices - the right housing solution should come from the rental market, by encouraging investors to return to invest in Israeli real estate. Contrary to the bitter war led by former Finance Minister Moshe Kahlon, investors, but also contradicts the position of the current Minister of Housing, Litzman, who sought to encourage investors to buy apartments only on the periphery. Katz advocates buying apartments wherever they see fit. Therefore, the tool he used as a window for eliminating investors - the purchase tax - will probably be used by Katz to return them.

The Treasury is familiar with the data: Exactly 5 years are now filled with Kahlon's decision to bump the purchase tax for investors. This was at the end of June 2015. Kahlon raised the purchase tax on investors from an initial level of 5% to an initial level of 8%. The aim was to remove investors from the market.

Indeed, investors did their calculations and from 26% of the market in 2014 and 2015, dropped to below 13% last year. The economy has lost revenue that, according to some calculations, reaches NIS 3 billion. The tax cut will persuade many of them to return their funds from Barcelona, ​​Athens and the United States to Israel, and are also the ones to provide housing solutions for those unable to purchase an apartment.

The metro, a project that Shlitzman protested for funding through, among other things, the Chief of Staff Fund (Israel Land Authority), is in one of the Katz program centers. He announced that his office intends to approve tens of millions of square meters of building rights in the city centers and sell them to developers;

By the time the budget is approved - if approved - things may change, especially at the political level. However, in every respect, the country seems to have reached a state where it can no longer fund housing experiments and whims.