Industry experts attribute the pessimism to the current security situation, which has negatively impacted both supply and demand elements in the sector. If the situation improves, the market should pick up slightly from its decline over the past few years.
Palestinian workers constitute about one-third of the construction sector's employees.
Katz said that even though the government has approved the entrance of an additional 9,000 foreign, non-Palestinian, workers, there will still be a labor shortage. Demand will also be affected by the political situation, as increased uncertainty about the future may deter or delay potential housing purchases. According to Katz, the housing sector is divided into two markets - sales and rentals. Sales are more likely than rentals to experience a slight downturn. Prices in the rental sector, which comprise the data used for housing prices in the government's calculations of the consumer price index, are more sensitive to the foreign-exchange rate than to the current unrest.