Bethel Finance: Clal Finance: Real estate risks as dangerous as Eurozone debt

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Bethel Finance news:

"In the current conditions, real estate risk at all levels, from the reduction in economic activity in the industry and in related industries, bank risk, and tax revenues risk, to the risk to price stability in the CPI, is as dangerous to the Israeli economy as the debt crisis in Europe," says Clal Finance chief economist Amir Cohenovich.

Cohenovich cites a Ministry of Finance report that real estate taxes and fuel excise totaled NIS 20.8 billion in January-November 2011. Clal Finance believes that tax revenues will be increasingly affected in the coming quarters, due to the ongoing slowdown in the real estate market, as well as the crisis in Europe, and a new rise in the unemployment rate.

Cohenovich attributes most of the 5.9% drop in direct tax revenues in January-November to the slump in land tax revenues, which totaled NIS 440 million in November, 16% less than in November of last year. "Tax receipts from land sales totaled only NIS 300 million in November," he says.