The interest rate cut, typically positive for the real estate market, is expected to have a limited impact in Israel. The housing market's issues stem mainly from political and security uncertainties and an oversupply. While further rate cuts are anticipated, loan repayment delays continue to rise. Many Israelis, despite their purchasing power, choose to emigrate due to the socio-political climate. High prices deter those who remain, and demand collapses due to lack of affordability. A 30% price reduction could revive purchases, but developers and mortgage holders want state intervention for rescue. Without adjusting supply, a rate cut might again drive up prices. The market needs to return to a healthy balance where housing expenses do not exceed 25% of net income. Delaying this balance could lead to a major economic crisis.
