Israel property investors not deterred by IMF

[JERUSALEM] Investors in Israel's real estate market are brushing off the International Monetary Fund's warning of a possible housing bust.

Africa Israel Residences Ltd has risen 3.3 per cent in the two weeks since the IMF raised the alarm, compared with the 2.7 per cent increase in the TA-100 Index. The yield on the company's 5.9 per cent bonds maturing December 2016 dropped 26 basis points in the week ended Feb 20, the biggest decline since Nov 28. Other home construction stocks have climbed even more, with Ashdar Building Co gaining 13 per cent since Feb 12.

"The IMF can say whatever it wants, but at the end of the day, there are plenty of transactions," said Shai Azar, a real estate analyst at IBI-Israel Brokerage & Investments in Tel Aviv. "Investors aren't getting wound up because people have been saying for a long time that prices are very high, and in the meantime they just keep climbing."