House prices in Israel indicate a change in the market trend

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 Housing prices in Israel indicate a change in the market trend

“I have instructed the director general of the ministry and the director general of the Israel Lands Authority to prepare staff to present a work plan that will maintain the momentum of land sales and the start of construction in order to cause prices to fall in the near future.” , — said Housing Minister Yitzhak Goldknopf this week as he opened a lottery for subsidized apartments under the Bargain House program.

dependent on any action taken by Goldknopf and other government ministers.

In fact, the prices of new homes on the open market are falling at a rate not seen in three years, and homes in central Israel, which have become the price risers, have fallen in price for the first time since the start of the Covid-19 pandemic. This price drop occurred not as a result of government policy, but as a result of a sharp drop in demand caused by higher interest rates.

The most prominent features of the latest period for which data are available are the fall in new home prices and the fall in prices in central Israel. New home prices fell by 0.9%, but the increase was moderated by the fact that 15% of new homes index, were bought as part of a price subsidy program for buyers. Excluding them, prices for new homes sold on the open market fell by 2.4%.

One of the changes that has characterized the market since then how interest rates began to rise is linked to the geographical preferences of buyers. The areas that led the rise in prices fell into a lull, while from April, when the Bank of Israel began to raise rates, until mid-November, the Haifa area recorded the largest increase in prices by 11.8%, ahead of Jerusalem (10.6%), Tel Aviv (10.2%), Northern District (9.4%), Southern District (9.1%) and Central District (9%).

Against this backdrop, statements such as that of the Minister of Housing sound disconnected from t the current reality, in which the supply of housing is not a significant factor, but is replaced by the financial situation of both developers and homebuyers.

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