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How does the Minister of Finance intend to deal with the boiling housing market?

Of all the issues of the cost of living, the real estate problem seems to be the most difficult to solve: also due to the complexity, but mainly due to the length of time required for the solution. In the housing market

Tags

• Real Estate

• Cost of living

• Avigdor Lieberman

• Minister of Finance

• Maariv

• Jerusalem Post

Sonia Gorodisky

Monday, 06 December 2021, 11:18 Updated: 11:39

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Three weeks ago, the Minister of Finance, Avigdor Lieberman, presented his forecast regarding the boiling housing market in Israel. According to him, this year will end with an increase of 11% and next year "an increase of 5-6% per year will be considered an achievement". If this optimistic outlook of the Minister of Finance, most citizens realize that decline in property prices not in sight at all. I mean, even such statements, self-fueling demand already overheated market.

A little over a month three ministers, Lieberman, almond and Elkin, solemnly presented The "government housing plan" that is supposed to curb galloping real estate prices, but it seems that the ministers themselves are also skeptical about its effectiveness and are very careful not to make promises when housing prices start to fall.

The plan presented, it must be said, is sufficiently comprehensive and includes measures that address both the demand side and the supply side.

It includes measures such as raising the purchase tax to 8%, which came into effect at the beginning of last week, banning the use of residential apartments for Airbnb purposes in the center, banning excessive use of residential apartments in the center, encouraging the splitting of detached houses and more.

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New apartments: We are no longer talking about a reduction, but only about curbing the rise in prices (Photo: ShutterStock)

121% increase in less than 15 years

But it is clear to everyone that the most effective step in dealing with the housing crisis in Israel is to build new apartments. The government has set an ambitious goal - 280,000 construction starts by the end of 2025, ie 70,000 construction starts a year, starting next year.

This is a very ambitious goal, but it is not something that Israel cannot meet. It should be noted that in the years 1995 to 2020 there was a sharp decrease in construction starts of apartments at a rate of 27.5% from about 72.9 thousand housing starts in 1995 in the great increase from the former USSR countries to about 52.8 thousand apartments in 2020. Either way, it can be said Whether the plan was successful or not in just a few years.

Since 2007, apartment prices have risen by more than 121%, and only in the last year have they completed a close to 10% increase. Due to the corona crisis and that housing prices in Israel have even risen moderately compared to many other countries.

Everything is true, it's just important not to forget to note that Israel's starting point compared to other countries was also slightly different.

Israel completes an almost continuous increase of about 14 years - since 2007, the prices of apartments owned by more than 121% have risen, ie more than doubled (data from the Knesset Information and Research Center).

Real estate: the problem is burning. The solution - at best - only in years (Photo: Reuven Castro)

Paris of the Middle East

According to a report by the consulting and accounting firm Deloitte published this year, Israel is ranked among the five European countries in terms of the difficulty of purchasing an apartment.

According to other CBS data, in 2021 the average Israeli needed an average of 138 salaries to buy an apartment, and this of course without other expenses. The problem is that other expenses in Israel are skyrocketing. The cost of living has risen in recent years in Israel. In Israel, compared to other countries, they are only expanding, that is, a decade has passed since the social protest against the cost of living in Israel and the situation has only worsened.

One of the goals set by the change government is to fight the cost of living.

In the meantime, it seems to be working in the right direction, but as the saying goes, money is being counted down the stairs - and the real test of the government will be in carrying out the same ambitious goals it has set for itself - import reform, government housing, land reform, regulation - all of which should The prices we pay at the supermarket or apartment owner.

Finance Minister Avigdor Lieberman during budget debates in the Knesset.

Will be hosted tomorrow at the "Summit of Business" conference, which will be broadcast live on the Walla!

(Photo: Screenshot, Knesset Channel)

"Business Summit" with the Minister of Finance live

Finance Minister Avigdor Lieberman will be a guest at the "Jerusalem Summit" conference of the Jerusalem Post, Maariv and Walla!

, Which will take place tomorrow and will answer the questions of journalist Anna Bersky, about real estate prices, the cost of living and other burning economic issues.

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