Real estate experts are saying that housing prices in Israel will continue to rise, but by how much is not clear, according to Globes on Monday.
The Ministries of Finance and Housing and the Israel Land Authority have all done studies that indicated an increase of 3%-4% annually over the next three years, at least, based on developers’ estimates.
The factors at work include the fall in building starts, and the hot sellers’ market of homes in recent months.
Globes asserted that “one of the main reasons for these rises is the absence of any coherent government policy to restrain prices due to the political instability and repeated elections over the past two years. The government Buyers Fixed Price program has come to an end and the proposed and more limited Reduced Priced Housing program has yet to get underway. So many young couples who were previously entitled to discount priced housing have tired of waiting and simply bought on the free market.”
The upward price trajectory has been reflected in marketing tenders. For example, the developers Guy and Doron Levy recently paid NIS 41.4 million for a lot to build 44 housing units in Em Hamoshavot in Petah Tikva – NIS 960,000 per housing unit, before VAT. Five years ago Rami Shbiro paid NIS 719,000 per housing unit for a nearby lot. In other words land prices rose 33% while housing prices rose 18%.
The Central Bureau of Statistics housing price index rose 1% in October-November. The index has risen 3.2% over the past 12 months. Prices actually fell 0.8% between March and May at the start of the pandemic, when many expected prices to go into a tailspin. But in the six months between May and November, they went up 2.7%, according to the index.