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The index is rising - the rise in apartment prices towards containment - voila! Real estate

2023-03-15T17:37:25.071Z


The price index in February was higher than forecasts and reached 5.2%. Apartment prices are up 14.6% compared to last year, but compared to the last few months, it is evident that the price increase has slowed down


The index is rising.

Will it bring down apartment prices? (Photo: Source: Ministry of Finance)

The price index breaks the expectations of economists

The consumer price index rose in February at a rate of 0.5%, well above the economic expectations that spoke of an increase at a rate of 0.2-0.3%, and overall in an annual perspective the index rose at a rate of 5.2%, compared to 5.4% last month.

This is what the Central Bureau of Statistics announces this evening.



If we judge the Bank of Israel according to the conduct it has taken in the last year, then now it will take a similar tactic that will lead to another increase in interest rates, most likely at a rate of 0.5% at the time of the next interest rate decision which will be on April 3rd.

As of today, the interest rate is 4.25% and the prime rate is 5.75%, this after the Bank of Israel raised the interest rate at the end of February once again by 0.5%.

Apartment prices are on the verge of slowing down

From the CBS data we learn that housing prices are on the verge of slowing down. From the comparison of the prices of the transactions carried out in the months of December 2022 - January 2023, compared to the prices of the transactions carried out in the months of November 2022 - December 2022, it was found that the prices of the apartments increased by only 0.1% and remained almost unchanged. In total Everything was completed by housing prices, an increase of 14.6% compared to the same period last year.



Some districts in Israel also saw a decrease in housing prices: Jerusalem (-1.1%), North (0.6%), Haifa (-0.9%), Center (1.3%), Tel Aviv (-0.5%) and South (0.1%).



In an annual perspective, double-digit price increases were recorded in all districts: Haifa (16.4%), Center (16.1%), North (16.0%), Tel Aviv (13.4%), Jerusalem (13.4%) and South (13.2%).

Sargo: "Marking a high inflation target" (Photo: Kafir Sivan)

Raul Sargo: The Bank of Israel needs to come to its senses

The president of the Ha'aretz Builders Contractors Association, Raul Sargo said in response to the price indices and the report of a drop in apartment purchases this week: "The government must set a higher and more realistic inflation target and the Bank of Israel needs to come to its senses, stop the rise in interest rates and correct the distortion that is seriously harming the construction industry and apartment buyers. In light of the spike in the shortage Every Israeli citizen will pay for the apartments within a few months."



Sargo adds: "I recommend that the apartment buyers check what happened immediately after the periods when the housing market froze, especially in the current situation, when the supply in the area decreases every month. The interest rate that has been rising for a year does not curb the inflation that can already be called 'sticky inflation.' Once world inflation is curbed, it will be difficult for us to say goodbye to it. The Bank of Israel has failed and we don't see a real change for the better in the level of inflation while interest rates continue to rise, given the work that a quarter of the consumer price index is based on the cost of rent and the volume of construction is decreasing every month, investors have been pushed out of the market and apartments for rent are disappearing from him."



The President of the Contractors Association mentions: "We have been warning for months that the Bank of Israel is missing the target twice, it is not stopping inflation and is also creating a huge pit of housing shortage beyond what was already here at the beginning of 2022. This is the same Bank of Israel that did not foresee the future two years ago and pushed Nutley mortgages to choose a route where three-quarters of the mortgage is linked to the prime interest rate. Their situation today is very bad. The Bank of Israel is obliged to prevent the financial collapse of those whom it has led to this difficult situation."



"The government must immediately begin moving to an expansive fiscal policy, which will include budgetary investment in minimizing the risks of developers and contractors and support for home buyers who can no longer take out a mortgage. It can recognize interest on mortgages for tax purposes and offer a budgeted mortgage to beneficiaries of the Ministry of Housing to the extent that will release the stagnation in the housing market that it has created Bank of Israel. We call on the government to implement a housing support program now with direct investment and not with new idle attempts to distribute apartments at a discount. Give money to those who really need an apartment and ensure that the apartments will be built quickly" - Sargo's words.

  • Real estate

Tags

  • The consumer price index

Source: walla

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