House prices in Israel are rising despite the decline in demand

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 Housing prices in Israel are rising despite the decline in demand < /p>

Despite the fall in the number of houses sold in Israel, house prices continue to rise. House prices rose by 2% in May-June compared to April-May and rose by 17.8% over the past 12 months compared to 15.9% last month, the Central Bureau of Statistics reported. According to the Israel Builders Association, there is no contradiction here, since the problem is not demand, but insufficient supply of housing.

According to the chief economist of the Ministry of Finance, in the first half In June 2022, 63,900 homes were sold, down 10% from the first half of 2021.

In June 2022, 10,500 homes were sold, down 24% from June 2021 .

The current stagflation and three interest rate hikes since April make it logical for the housing market to cool down.

As for the supply of new homes, it has been stable over the past few years. The housing stock has increased due to the start of construction, which at the end of March 2022 was 69,000, the highest since the 1990s.
< br /> And this is not the whole picture. The chief economist of the Ministry of Finance found out that over the past year the number of people buying houses “on paper”, that is, construction of which has not yet begun, has increased. These figures are not included in the data on the start of construction, nor in new home sales data. This is a significant number, because since August 2021, 50% of homes bought from building contractors on the open market were “on paper”, and in June 2022 this share rose to 60%.< br />
With investment home sales plummeting after the purchase tax was raised last year, the number of homes rented out is declining very quickly, driving up rents.

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