The kibbutzim have discovered a new way of making money from their land. They have started to establish new neighborhoods or people who want to enjoy all the benefits of kibbutz life, but do not want to be members. Many people are wondering if Israel is on the verge of a real-estate crisis, and potential home buyers and sellers are asking what they should do. Of the 150 developments offered for sale to potential US investors, principally to the Jews among them, the 50 local real estate developers managed to sign preliminary contracts for the sale of only 60 apartments. The real-estate sector has suffered from a slowdown in the past year which first hit the exclusive developments, shifted to commercial and office buildings and eventually reached the general housing market.
New regulations threaten to limit the amount of credit given to builders.
During the past few months, builders have been saying that the Bank of Israel's plans to put a lid on credit will place additional financial pressure on them, making it almost impossible to meet tender requirements. But bankers insist the new regulations will not harm the contractors. One of the reasons given for the high prices of real estate in Israel is the entry into the local market of foreign residents who are willing to pay top dollar for quality luxury housing. In certain areas, particularly in Jerusalem, the luxury-housing market has been profoundly affected by foreign residents. To change the image of the neighborhood, the council has begun raising the standard of education, emphasizing local cultural facilities and activities and focusing its attentions on the environment.