ILA chief: We must increase land supply to halt price rises

Director General of the Israel Land Authority Yanki Quint spoke today about the land sale in Kibbutz Ha’On at the Globes conference on Kibbutz Momentum, held in cooperation with Israel Discount Bank. Quint explained to Globes editor Bar Lavi that Kibbutz Ha’On is being dismantled, turned into a community settlement and is going bankrupt. He said that criticism of the Israel Land Authority was that the land being marketed for 248 plots in Ha’On would only be purchased by the wealthy, and that priority was not given to discharged soldiers and reserve soldiers.

They are angry with you because of the tender the Israel Lands Authority submitted for Kibbutz HaOn.

“It wasn’t written in my job description to be nice, so I give less importance to that. We work in a professional and serious manner. There are parallels to Kibbutz Ha’On, such as Kibbutz Mishmar David, which was dissolved in the past. Kibbutz Ha’On went into bankruptcy, and the state reached an agreement with its members. The state financed their pensions, infrastructure development, and the transfer of agricultural land to the Jordan Farmers Association. In this way, the plots of land in Kibbutz Ha’On will be marketed. We honor the agreements. We are also making arrangements similar to Kibbutz Ha’On to create a land reserve, with other public bodies including the Defense Ministry and universities as well as private organizations such as kibbutzim or other associations.

“The land resources on the Sea of ​​Galilee (Kibbutz Ha’Avun is located near the lake) – if I had to plan it, I would plan it as a public beach. Today, on the shore of the Sea of ​​Galilee, I have to wait half an hour to get to the beach. Since it has been determined that there is a settlement there, we support any fair solution.

“The tender was issued with priority given to reservists, even before October 7. We gave discounts and priority in the tenders, and 63% of the plots go to reservists and disabled IDF soldiers, an unprecedented number. There are no emperors, oligarchs, Saudi sheikhs, or their sons. Families came from all over the country, and the offers (on land prices) there were very reasonable.”

“We see a decline in land prices.”

The criticism against you is that you look at Excel spreadsheets and basically want to rezone land for housing.

Quint: “The estimates here among the public are that housing prices will rise significantly. Our mission is to provide land for all the needs of the economy. Of course, providing land for housing construction – first and foremost. It is not easy to do. We need to seize agricultural land, certainly with the kibbutzim, which are the main players in agricultural land. There is a new spirit in the kibbutz movement, and they are ready to think about new arrangements regarding the center of the country.”

But housing prices are still rising.

“We are seeing a decline in the prices of the land we are marketing. Over the past four years, we have marketed land for 400,000 housing units, and we have seen a 20% decline in land prices. But construction takes longer, and with interest rates rising, which makes financing more expensive, and input prices rising, housing prices are rising. Contractors are also selling using the 10/90 method (paying 10% when signing the contract to buy the apartment). This involves significant financing costs for the contractors. This is a discount of 8% or more on the price of the apartment.”

How can this trend of rising prices be stopped?

“We must continue to increase the supply, including expanding the “target price” program. We need to offer a greater discount in the peripheral areas, in order to create priority there. We are having difficulty with this with the Finance Ministry. It is true that housing prices will be much lower in the peripheral areas. We have considered supporting the marketing of land in the peripheral areas together with land in the center, and we have called it Dimona/Sarona. We need to offer lower prices in the peripheral areas and make them attractive.”

Full Disclosure: The Kibbutz Momentum Conference was held in cooperation with Israel Discount Bank, Doral Group, the Kibbutz Movement, the Kibbutz Industries Association, and the Kama Fund.

This article was published in Globes, Israeli Business News – en.globes.co.il – on September 18, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.