Report: Lack of Construction Workers Stymies Building, Keeps Prices High

Due to a lack of construction workers, new buildings are being held up from being completed – and despite its best efforts, Israel has been unable to close deals with countries that it has been looking to for construction workers. Deals with China, Bulgaria and Ukraine are either frozen or incomplete – and the lack of workers is starting to have a major impact on the housing market.

Currently, there are 41,000 construction workers in Israel – 17,000 of them Israelis, 7,000 foreign workers from abroad, and 41,000 Palestinians. According to a report in business daily Calcalist, there were 4,047 Chinese construction workers in Israel in 2015, 1,937 from Moldavia, 383 from Bulgaria, and 128 from Romania.

With this number of workers, it takes approximately 27 months to build an apartment, from the first breaking-up of the land by a tractor to the delivery of the key to a purchaser – and in order to increase the number of apartments on the market and thus bring prices down, the government would like to speed that pace up considerably. In order to do that, however, thousands more construction workers are needed.

The question is who will build those homes. One of the places the government is hoping to import workers from is China. Last September the government approved the importation of thousands of Chinese construction workers, but the Chinese government has not yet approved the workers’ migration, because no agreement has yet been signed guaranteeing the workers’ rights. Kachlon told the contractors that “things may be starting to move” regarding the Chinese workers, and that Prime Minister Binyamin Netanyahu had been in direct contact with Chinese leaders on the matter. There are similar holdups in deals Israel is trying to close with other countries, including Ukraine and Bulgaria.

Last week, Finance Minister Moshe Kachlon told contractors that Israel will be “welcoming” tens of thousands of Palestinian construction workers in the coming months. Kachlon told contractors that he had in recent weeks met with top officials in the Palestinian Authority, who expressed great interest in the program.