""We have all been waiting for 5 months for zero VAT, but the uncertainty is harming the Israeli economy," said Nissim Boublil, president of the Israel Builders Association, at a press conference today (Wednesday). "I call on Finance Minister Yair Lapid, if you think you can pass the law, pass it now, and if not, get out of the way quickly.".
Boublil added: "Shalipid will admit that he tried and failed, and will return the economy to certainty, so that every citizen of Israel can finance his actions. If the situation of uncertainty continues, the situation will only worsen. The apartment will only become further and further away from the citizens of Israel. In the 1990s, we built over 80,000 housing units in a short time, today the time period has doubled, and the number of apartments has decreased by 501%.
Boublil also addressed the economic situation of the Israeli economy at the macro level: "In recent months, the economy has experienced a decline in exports, a crisis in tourism and the construction industry. The past few months have paralyzed all the growth engines of the Israeli economy, and to all this we must add the war. We all know that the prime minister has abilities in the economic field, but in the background, every minister voices his opinions in the field for political reasons. Therefore, if the prime minister does not win the orchestra, the economy will reach a dangerous situation, and we must understand that there is no security resilience without economic resilience.".
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According to Boublil, "We are in a complex period for the Israeli economy, and the construction industry in particular. We went through the period with declarations and promises, and today we are on the eve of a socio-economic crisis that can be prevented. The one who should be at the forefront of this matter is the Prime Minister, who must enter the socio-economic cabinet. It is impossible for political, personal, or prestige considerations to sabotage such an important industry and the economy of Israel. The construction industry has always been the engine of the economy, and constitutes 101% of the gross domestic product, and someone deliberately decided to stop this engine.".
""In the 1990s, we were facing a much bigger crisis, when a million immigrants were about to immigrate to Israel, and today we are in a worse situation. In the 1990s, we provided an immediate solution to the problem, today we do not. What we received to solve the problem were declarations of zero VAT. We supported the initiative, but for five months now, nothing has happened with this declaration. From data from the Ministry of Finance and the government appraiser in recent days, we have come to know that since the government's declarations of zero VAT, apartment prices have only increased, and anyone who listened to them and did not buy an apartment in the last five months has already lost 30,000 shekels. According to data from the Ministry of Finance and the government appraiser, they are paying an additional 1.71 trillion shekels than they would have paid before the declarations.".
Boublil also addressed the state's tax losses as a result of the stagnation in the market: "In the last 5 months, the government has lost 6 billion shekels in real estate taxes, which it could have received, and could have financed the consequences of Operation Protective Edge without the need for cross-cutting cuts as are being proposed today. The time has come for the Prime Minister to show leadership, and to stop selling illusions to the public and to understand that the housing crisis is a national mission. The Prime Minister instructed the ministers to address the housing crisis, but they have failed miserably in all parameters.".
""The Israel Land Authority failed miserably when it did not meet the marketing goals set by the Prime Minister, and marketed half of the volume required of it by the government," said Boublil, explaining that according to data from the Israel Builders Association, the volume of tenders in the first half of 2014 reflects an annual marketing rate of only 21,000 housing units, compared to 30,000 in 2013.
""Now they are looking for the guilty," added Boublil. "The allegations against the Bank of Israel governor who lowered the interest rate are unjustified, they are not hysterical, they are simply realistic. The Bank of Israel lowered the interest rate because it anticipated the situation and the attack on Flug is out of place. Worse still, the statements by the Minister of Housing and the Minister of Finance not to buy apartments are false statements. Anyone who is familiar with the construction industry knows that talk, false statements and various tricks have not yet built a single apartment in Israel.".
The CEO of the Israel Builders Association, Eliav Ben Shimon, also noted that the rise in apartment prices by mid-2014 reflects an annual rate of price increase of 91%, with the average price of a new apartment in Israel in the first quarter of 2014 standing at 1.55 million shekels. According to Ben Shimon, construction starts fell by 61% in the first quarter of 2014 compared to the previous quarter. At the same time, the 40,000 construction starts that characterize 2014 do not meet the government's target of 60,000 construction starts, nor does it address the natural rate of growth in households, which requires 43,000 construction starts per year.
Another disturbing statistic presented by Ben Shimon is that the number of months to complete the construction of an apartment increased in 2014 to 27 months, while in the early 1990s the construction rate was only 15 months.
""In the first quarter of 2014, construction completions fell by 151%, a decline that reflects a severe shortage of workers and uncertainty in the industry," added Ben Shimon. "All of this must be added to the Ministry of Housing data, which indicates an existing shortage of 114,000 apartments in Israel today.".
When asked why the Israel Builders Association is not working to shut down the real estate industry as a protest against the government's conduct, which the association is protesting, Ben Shimon replied that the Israel Builders Association already applied to the Antitrust Authority six months ago to receive permission to shut down the economy, but did not receive the approval, and therefore shutting down the industry by it would be a criminal offense under the Antitrust Law.
""Absurdly, the regulation prohibits us who come from the industry and represent the industry from expressing our professional opinion, while government ministers who are politicians who are not knowledgeable about the construction industry can, by law, release irresponsible slogans that call on the public not to buy apartments," explained Ben Shimon.
