Housing shortage caused prices to rise (illustration)
Photo: Maya Kuperman

Housing prices up 30% since 2008

Government assessor concludes that housing shortage is main cause of rising costs, despite Bank of Israel's efforts to keep demand for homes down

Housing prices in Israel have risen by 30% over the past two years, according to a report published by the government assessor on Monday.


A review of housing prices in the last quarter of 2010 showed that the costs in 16 Israeli cities were up by 3.8% compared to the third quarter (not considering inflation). The consumer price index, excluding housing, has risen by 1% over the same period.


The review also showed that home prices are up by 13.7% compared to the fourth quarter in 2009. The CPI has risen by 1.9% over the same period.


The cost of housing has risen by 29.4% compared to the fourth quarter of 2008.


The report lists the shortage in housing as the primary cause of the rising costs. On the demand side, several factors registered to have contradictory effects, including expectations for continued growth, potential for a continued rise in the real interest rate, and hope for government measures that would lower housing prices.


However, the review showed that all these factors combined did not affect the costs as much as the supply data.


The report lists a few major measures that were taken in the fourth quarter of 2010, and influenced the prices of housing - including the Bank of Israel's decision to raise interest rates and place limitations on mortgages. These measures aimed to reduce the demand for housing and curb the rise of prices in the industry. Meanwhile, improvements continued to register in the financial indices that cause housing demand to rise.



פרסום ראשון: 02.08.11, 07:43
 new comment
This will delete your current comment