The silent killer of Israel's real estate market

When we say "real estate bubble," we immediately think of the American bubble. We think of years through which housing prices rose and rose, only to suddenly collapse, leaving people impoverished. We think of the collapse of the financial system that financed the real estate bubble. We think of the huge segment of the public that believed housing prices could only go up, and of the banks and credit rating agencies which invented the financial tools that sowed such tremendous destruction in the global financial system. And so, when we talk about whether there is a bubble in the Israeli property market, we automatically wionder whether housing prices will continue to rise or whether they will drop sharply; whether Israeli lenders will meet their payments or whether there will be a large wave of insolvency; and whether Israeli banks are prepared for unemployment, recession and a wave of American-style mortgage defaults.