Home News Israeli housing prices keep soaring, up a record 19% from last year

Israeli housing prices keep soaring, up a record 19% from last year

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According to a Central Bureau of Statistics (CBS) report released on Friday, Israel’s house prices soared a record 19% last year.

Prices have been steadily rising since late 2018, but their continued rise defied expectations, lower demand and reality in most of the world’s housing markets. Confirm price slowdown or drop.

Overall, the cost of living also continued to rise, but at a more moderate rate.of Consumer Price Index (CPI) rose 0.2% In September, it rose to 4.3% year-to-date, up 4.6% year-on-year.

The increase in overall cost of living was driven by rising fruit and vegetable prices, which rose by 3.3%. However, excluding housing and fruit and vegetable costs, the growth rate dips to a seasonally adjusted 0.2% for the month, the slower rate of growth seen in the last seven months.

Prices of most food items, except fruits and vegetables, fell, with fresh fish down 7%, tahini 4.7% and rice 3.9%. But milk is up 2.1% for him, and fresh food shoppers buy shows his double-digit gains, with peppers up 11.4%, cucumbers up 11% and watermelons up 47.8%.

Health spending showed a modest rise of 1%, while educational and cultural activities remained stable, reporting a 0.1% decline.

Rising home prices seemed to defy the logic of the market that demand for new homes would decline, mortgage costs would rise, and homes would remain on the market for a long time.

Anger over rising housing costs and the rising cost of living is mounting across the country more than a decade after Israel last saw widespread unrest on the issue.

As the consumer price index and house prices continue to rise, the Bank of Israel may continue to raise interest rates to prevent the economy from overheating. This will further increase mortgage rates, making it more difficult for prospective buyers to find loans to justify rising prices.

Ramat Poleg District, Netanya, July 9, 2021 (Moshe Shai/FLASH90)

New tenants were experiencing an 8% monthly rent increase, according to the data, but that excludes many tenants with ongoing leases, so for the foreseeable future, the impact of significant inflation in home prices should be outweighed. No, it will affect the rental market as well. .

Average home prices increased 1.9% in July-August compared to June-July. data from CBS.

The increase was led by 2.6% and 2.8% month-on-month increases in the North and Jerusalem respectively. Housing inflation in Tel Aviv he had 1.9%. The figures of 1.8% across the centers and 2.0% in Haifa show inflation slowing slightly compared to last month’s numbers.

However, year-on-year, all regions showed double-digit increases in house prices, with Haifa (20.1%) and the north (20.3%) seeing the sharpest increases. Central (21.2%).

Both new and used properties are trending upwards, with new property prices up 23.2% from July to August 2022 compared to the same period last year. However, one of the factors contributing to the rising prices of new homes, rising material costs and thus the construction index, has been tapering off. does not increase In the September index.

Other market data published by CBS report Demand for new homes fell by 3.1% in July, but only 2,780 new homes were sold in July, often sitting on the market unsold for months.

After seasonally adjusting, the market declined by 14.4% in the three months from May to July. Oversupply, longer sales periods and reduced demand should lead to a market where house prices are likely to fall, but that doesn’t seem to be happening. It seems that the property is either kept vacant or ready to be rented out until it is available.

A view of the new skyscrapers in Hod Hasharon, central Israel, September 14, 2022. (Michael Giladi/Flash90)

The volume of new apartments changing owners has now declined for more than six months.From May to July, Tel Aviv and Haifa (only 2.6% and 1.9% respectively), Ashkelon (19.3%) and Ramat Gan (35.2%) %), Beit Shemesh (31%) and Rishon Lezion (28.9%) saw market activity decline. %), Beersheba (17.7%), Ashodd (17.7%), Nehariya (2.2%), Petach Tikva (16.6%), and Harish (19.5%).

The highest growth levels of new apartments sold compared to the previous month were in Or Yehuda (up 242.4%) and Dimona (up 155.7%), which now offer cheaper housing options. Netanya (22.3%), Jerusalem (9.9%), Bat Yam (15.6%), Ramat HaSharon (84.6%), Eilat (13.3%), Afula (10.6%) and Raanana (2.5%) also showed growth. rice field.

Netanya, Tel Aviv, Jerusalem and Ashkelon were the only markets with over 400 new listings for sale in the three months from May to July.

It remains the case that just under a quarter (22.6%) of new properties sold were subsidized through one of the government-backed schemes (Mehir L’Mishtaken and most recently Mehir Matara). is.

A study by global banking network UBS found that housing bubble It will happen in Tel Aviv in the near future as the gap between housing prices and wages is widening.

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