Israel Housing Prices Surged Over 10% in Past Year

Housing prices in Israel have surged by 10.3 percent in the past year, according to data released Wednesday by the Central Bureau of Statistics. Last month saw housing prices climb 0.9%, the report said. According to the Globes financial daily, the spike in prices in the past year marked the largest such increase since 2010. Prices in Jerusalem are up 11.5% in the past year; in Haifa and the south, 9.9%; in Tel Aviv, 9%; and in the north, 8.6%. The statistics bureau also published data Wednesday on consumer goods. November saw consumer goods go up in price by 0.1%. In the past year, consumer goods have increased in cost by 2.5%, compared to 2.4% over the same period last year. Governments have long promised to lower ever-climbing housing prices for over a decade. The sky-high costs have put home ownership out of the reach of many Israelis, weakening the middle class. The reasons for the costs include restricted supply, planning, fiscal policies and the large number of investors buying up multiple housing units. In October, the government unveiled a major housing plan for 2022-2025, aimed at rapidly increasing the supply of apartments in the hopes of reducing prices. Finance Minister Avigdor Liberman said last month that the government would narrow the gap between supply and demand in three or four years. According to a recent study by the Alrov Institute for Real Estate Research at Tel Aviv University’s Coller School of Management, the average cost of a four-room (three-bedroom) apartment in Israel stands at NIS 2.2 million ($682,608), and the average equity required for a minimum 30% down payment and surrounding expenses was estimated at about NIS 840,000 ($261,140). In Tel Aviv, the most in-demand and expensive housing market in the country, the average price for a four-room apartment reached over NIS 4,280,000 million ($1,329,671) in the second quarter of 2021. Earlier this month, Tel Aviv was ranked the most expensive city in the world to live in. Last month, the Bank of Israel announced a series of reforms it said are meant to make the process of taking out a bank mortgage more transparent and competitive for borrowers.