New data disputes government claim of dealing with housing crisis
CBS statistics show that housing starts fell by 8% in 2014, primarily in high-demand areas, while construction on luxury homes continued apace.
Following the publication of the State Comptroller's damning report on the housing crisis in Israel, the government argued in its defense that the government's failures were being dealt with. But new data from the Central Bureau of Statistics undercuts this claim, showing that there has been no shift in government strategy at all.
Last year, housing starts fell by 8% - particularly in areas where there is high demand. Furthermore, it appears that construction on luxury properties continued unabated, with one third of all homes whose construction was completed were houses or duplexes.
According to the statistics, construction began on 43,620 apartments in 2014 - a decline of 7.9% from the year before, when work started on 47,351 apartments.
On the other hand, CBS data shows that construction was completed on 44,810 apartments in 2014, up 5% from 2013. By the end of last year, there were about 93,000 apartments under construction – a 4% drop from its peak at the end of March 2014.
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The decline in housing starts was felt mainly in the south and in Tel Aviv. In the south, there was a downturn of 27.7%, most likely due to the summer war in Gaza. In Tel Aviv, the number of housing starts fell by 17.3% and in the central district by 6.5%. There was also a decrease of 52.5% in housing starts in the West Bank.
Communities that registered a decrease in housing starts include Rishon Lezion - construction began on 827 apartments, a decline of 34.1% from 2013); Be'er Sheva - 638 apartments were started, down by 31.6% from 2013); Rehovot – construction began on 743 apartments, down 24.1% from 2013).
However, over the past year there has been an increase of 14.8% in housing starts in the Haifa area, an increase of 9.6% in Jerusalem and an increase of 3.2% in the north. Most of the construction last year was concentrated in north and center, with 29.3% of housing starts in the central Israel and 20.7% in the north. Of that number, 31% were for private houses or duplexes.
Other communities where there was an increase in housing starts include Haifa - construction started on 768 apartments, an increase of 43.6% on 2013; Ramat Gan –construction began on 1,270 apartments – a 40.6% increase from 2013; and Ra'anana, where work started on 838 apartments, an increase of 39.4% from the previous year.
The Ministry of Construction and Housing said in response to the Central Bureau of Statistics data: "The pace of housing starts in Israel in 2014 remained at a high rate, and the final number of housing starts for the year is expected to reach some 47,000 apartments or more. As the CBS noted in its statement, the figures for last three quarters are incomplete, and are subject to change."
"The CBS statement from exactly a year ago, which summarized 2013, said that housing starts totaled 44, 340 apartments, which has in the meantime been updated by another 7%. Every year, the data on housing starts is revised upwards by some 7 or 8%, and the number of housing starts in 2014 is expected, according to estimates by economists at the Ministry of Construction, to reach approximately 47,000, as it did in 2013.
The ministry also insisted that 2014 was a year in which some contractors were leery of beginning new construction, in the wake of Operation Protective Edge in Gaza and planned legislation on house prices.
