The Marker, Gili Melnitsky, 10.03.2021
Despite contractors' reports of record sales of apartments in the last quarter of 2020, the corona plague has not missed the housing market. The crisis caused a great deal of uncertainty, which, although it did not lead to price declines, severely affected one of the activities that characterize the real estate market - real estate brokerage.
Data from the National Association of Realtors obtained by TheMarker indicates a 25% decrease in the number of active realtors in 2020. This decline is part of the crisis affecting the entire labor market, and is also due to the increase in the weight of new dwellings from all purchase transactions, as shown by data from the Ministry of Construction and Housing, which usually outperform real estate services.
According to the Economic Analysis Division of the Ministry of Construction and Housing, out of approximately 113.5 thousand transactions for the purchase of apartments made in 2020, the number of transactions for second-hand apartments decreased to approximately 73,000 - from a level of approximately 87,000 in 2015; While the number of deals in new apartments rose to about 41,000 last year, from a level of about 23,000 apartments in 2012.
The increase in the weight of new dwellings from all transactions is affected, among other things, by " price per occupant " and " housing at a reduced price " programs , which for many years have encouraged young homeless couples to buy new dwellings from a contractor rather than housing developers. Thus, the share of new dwellings in total transactions increased to 36% last year, compared with an average of 25% in 2014-2012.
According to the Chamber of Realtors, in 2020 the bureau recognized about 17,000 active realtors, compared to about 23,000 in 2019. Data from the Registrar of Realtors in the Ministry of Justice also indicate a decrease, but more moderate: from 21.4 thousand in 2019 to about 20,000 last year - but also a jump in early 2021 in the number of active realtors to about 22.7 thousand, a record of recent years.
However, in a position paper submitted by the Chamber of Realtors to MK Oded Forer in October, it reported "a significant number of realtors in real distress and their families in need of living assistance," alongside "realtors unable to meet the rent payments of the firm where they run their business. To the point of violating agreements in extreme cases. "
Other factors that influenced the decline in the activity of realtors during 2020 are also related to the rental market for residences and offices, and commercial real estate. Employers who were forced to give up their offices; Students who gave up apartments they rented in the face of the transition to distance learning; Tenants who operated the apartments as vacation apartments intended for short-term rent, and more.
The uncertainty created during the closure periods caused brokers to slow down the pace of transactions, making it difficult for new brokers to operate. On the other hand, it can be seen that the vacated properties and the decline in demand also constitute an option for realtors to offer themselves to the property owners. This figure could explain the industry's rapid recovery towards the expected return to routine.
Plowing buildings Photo: Gil Eliyahu
Rapid recovery
In the last quarter of 2020 and the first months of 2021, when the economy began to show signs of recovery, brokers rushed back to the real estate market. It can be assumed that better data presented by the housing market in the past year, including a 4% increase in housing prices (according to CBS), has A key part of this: In the last quarter of 2020 and so far in 2021, licenses of more than 3,000 brokers, including new ones, came into force, and today there are more than 20,000 active brokers on the market.
Itzik Levy, chairman of the National Real Estate Brokers Association, says that "the first closure caused a shock in the market, and just a year ago - in the first closure and in March-April - many deals were stopped, and independent realtors collapsed. "The housing market, and the return of investors - mainly due to the reduction of taxation on a second apartment - including from abroad, who bought apartments in Zoom, even without stepping on them."
He said, "This trend continues even now, when the vaccine plant has gained momentum and Jews living abroad see Israel as a 'green island.' Rises in housing prices and the slowdown in land marketing are also encouraging investors to buy now, so we believe that the recovery in the activity of realtors will be quick and immediate. People always need a roof over their heads. "
Itzik Levy, Chairman of the Chamber of National Real Estate BrokersPhoto: Yahel Herman
Levy also explains that the decrease in the number of active brokers does not indicate that they are less necessary, but rather technical processes that made it difficult to issue a brokerage license with an annual fee of NIS 216 - following the decrease in the number of brokerage tests held in 2020 (three tests). The closures and the provisions of social distance. "Out of all license holders, we estimate that there are 15-14 thousand active brokers, with most brokerage license issuers not surviving the first year," he adds.
"In fact," Levy claims, "our data shows that eight out of 10 new brokers do not survive the first year. It's amazing that there are those who still managed to make big deals even within the closures, some with the help of virtual tours and evolving technologies."
Construction in Netivot Photo: Eliyahu Hershkovitz
The new threat?
Meanwhile, the real estate developer in New announced last week its intention to "delete all we knew about the world of mediators, and to organize a new market." The developer Tal Mlnboim and brokers Ward Israel Ram Haas set up a new website called Get Key - with a platform for virtual tours of assets for sale And for rent under the guidance of a virtual model.
The Get Key business model also introduces a novelty when it comes to payment: instead of each party (seller and buyer) in the transaction paying a brokerage fee of 1% -2%, the amount of which reaches tens and hundreds of thousands of shekels - in the new venture the property owner will pay a pre-determined amount: 799-599 NIS 5 for the presentation of the property if the transaction is realized - and an additional payment to a human broker who will accompany the transaction on behalf of the site - between NIS 5,500 and 12,000, depending on the size of the property and the length of time it was on the shelf.
According to Israel, owner of a real estate agency in Haifa, "Buying an apartment is the biggest deal most of us make in life, but the 2% actually set for a brokerage fee from each party at the time of purchase has become a source of bargaining when buying or selling a property, and rightly so. Such a commission paid in transactions has no place in the new real estate era, where it is also appropriate to sell and buy properties in an efficient way and in a convenient interface that reveals in advance the wording of the taboo and the full apartment, and not in pictures you beg from the landlord or realtor.
Get Key website Photo: Screenshot
"The Corona has proven that it is possible to sell an apartment at the push of a button, just as you can sell insurance or a car. This is also how it should be possible in real estate. .
According to the company's estimates, 40% of the purchase transactions in the Israeli market are carried out by brokers, who were severely damaged during the Corona period, partly due to the difficulty of showing and visiting properties. The realization of the platform's potential to bite into the activity share of the traditional brokerage market is mainly related to the ability of the developers to raise assets and brokers who will join the platform, and will be willing to change their model of activity.
Assaf Epstein, Deputy Chairman of the National Chamber of Real Estate Brokers, is skeptical: “Even if the corona has restricted the activity of realtors, it is clear that the human factor in real estate transactions is significant. "The knowledge of a realtor who knows the neighborhood in depth, knows the history of the building and the property, checks liens and foreclosures and makes information accessible, is something that accessibility on a virtual tour for NIS 5,000 cannot replace."