The real estate bubble and those outside of it
By Eretz Acheret | 02/12/2010
The number of apartments sold in Israel in the third quarter of 2010 is the lowest since 2006, according to figures published in November by the Ministry of the Treasury. Does the 28% decrease in investment in apartments demonstrate that buyers have exhausted the limits of their spending power? photo: Dani Eshet
Is Israel also facing the bursting of the real estate bubble?
As we can see from the Irish example, a real estate bubble is the product of a collective illusion. Real estate developers, supported by Irish banks and others and in collusion with political leaders, nurtured the middle class fantasy that “living like the rich” is quite attainable. Following unprecedented growth, the nouveau riche enclaves that blossomed in the past ten years are becoming a symbol of disillusionment. The Irish government must now curb its spending, and its taxpayers must compensate for the banks' excesses.
The Ministry of the Treasury fears the bursting of a real estate bubble, but like the Irish government, is not addressing the social significance of what may seem like “economic growth,” but is actually a widening gap between rich and poor. This week, we choose to represent the social face of the real estate bubble: on the one hand, the well-heeled, socially alienated residents of Tel Aviv's luxury towers most of whom can be counted among society's wealthiest members, and, on the other, the rest of the population that is, by degrees, losing the safety net (free education, health care and a pension) the State once provided.
Translated by Barbara A. Landress