Jerusalem (Nov. 12)
Not even during the palmy days of the Tel Aviv “boom” in 1924-1926, when purchase of land and structural operations aggregated millions of dollars, have conditions in this country been so bright and full of promise as they are at present. Speculators and builders are doing a real land office business in all three cities, as well as in the Jewish colonies, and there is the phenomenon of men and materials being insufficient for the demand.
Greater investment security, giltedged title, the need for dwellings and apartment houses to accommodate the thousands of newcomers, the real demand for industrial and commercial establishments, â€” these and many other factors have contributed to the present rise in urban and rural values.
INTEREST RATES DOWN
Moreover, the influx has only just started. In September, no less than 450 Jews with means above $5,000 each entered the land as permanent settlers, and many more are on their way. A cautious estimate of the imports during September alone puts the figure at close upon three million dollars.
What effect has all this activity had upon the money market? It has certainly sent down interest rates. People want to invest their money either in actual building or in mortgage loans, or in orange-groves and agricultural activities in the rural areas; but there is so much credit available, and money is piled up in banks on deposit accounts to the tune of $35,000,000 at least, that money can be had for the asking.
The present “boom” is an artificial one caused by the high wages that are being paid as a result of the shortage of labor, and while it is bound to subside as soon as wages are forced down by labor increase, nevertheless the boom is a fact and is affecting many branches of enterprises, some of them detrimentally, such as industry, from which men are transferring into the building trades, where wages are higher.
One evidence of the booming times is the precipitate rise in labor rates to a competitive basis. Rough labor is not easy to get, while as for trained workmen, their employment is almost a physical impossibility because there are no skilled artisans unoccupied, according to a leading engineer-contractor.
“Buildings have had to be held up because of this shortage of men”, he said. “Costs of materials have risen, and are still rising, alongside of wages, in many places. The increase in the standards of wages and in prices of materials ranges between 30 to 40 per cent, compared with a few months ago, during the summer. Even in Jerusalem, where the scarcity of water for building purposes has held up construction in past years, there is now a decided boom, and laborers are just as difficult to get in the capital as they are in the more progressive cities of Tel Aviv and Haifa.”
Skilled men are now receiving up to $4 and $5 a day, and their services are being angled for by contractors seeking hired men. This competitive situation has thrown practically the whole market out of gear.