Apartment prices have risen more than 15% in the past year - a record rate of 12 years.
A real drama, and the disturbing thing is that the climax is probably still ahead of us.
This is because the data published by the Central Bureau of Statistics do not include the month of March, during which an all-time record in the volume of mortgages was recorded - NIS 13.4 billion.
Therefore, it is likely that not only will the rate of increase not moderate, but also exceed the 15%, and young couples can say "bye-bye" to the dream of the apartment.
And what is the government doing?
The government seems to have fallen asleep on guard, given up, and is offering a lottery of 10,000 housing units (and another 20,000 probably later this year) - which at the current level of demand is a drop in the ocean.
High housing prices are one of the main reasons for the high cost of living in Israel.
In the past year, apartment prices have risen all over the world due to the rise in the price of raw materials and reasons related to the exit from the Corona crisis, but in Israel the starting point was different from the beginning.
Today, in order to buy an apartment in Israel, you have to work an average of 17-19 years - much more than is required in other developed countries, not to mention the equity that many young couples simply cannot achieve without the help of their parents.
Construction site in Be'er Sheva // Photo: Dudu Greenspan,
In order to address the housing price problem, the government must first and foremost present a new, comprehensive and multi-year plan that will define clear goals and the ways to reach them.
This is because the government housing plan presented last November by three ministers - Ayelet Shaked, Zeev Elkin and Avigdor Lieberman - has not moved into the housing market, and since then prices have not stopped rising at a rate that is only rising.
The plan presented, parts of which were even lifted (such as the Airbnb ban in the central region) did not include a price reduction target at all, instead, the three ministers in charge of the housing market did not miss opportunities to inform the public that prices would continue to rise, further igniting demand.
A plan without a clear destination is like a ship without a navigator.
Lowering apartment prices is a process that will take quite some time, but in the meantime, it seems that this is not really burning for decision makers.
The high real estate prices are the government's milk violation - billions of shekels flow into the state coffers every month from taxes related to real estate - praise tax, purchase tax and more.
In addition, given the hundreds of billions of shekels in mortgages in recent years, banks would also not want to see a decline in housing prices, certainly not a sharp decline.
Lieberman has a plan in the drawer that focuses on limiting land prices in state tenders, so that an entrepreneur who offers the lowest land price will win the tender.
The plan reduces state revenues from taxes on land by a considerable amount, and it looks promising on paper, but it is not at all certain that it will materialize in the face of the government's political paralysis.
Recently, the Bank of Israel came out to address the problem of soaring housing prices and this week raised interest rates for the first time since 2018. This is an important step that should help the government deal with the influx of mortgages that to date have been absurdly granted on current financial terms and low interest rates.
"If you go to an election year, apartment prices could jump at a higher rate than in 2021," Raul Srugo, president of the Builders of the Builders Association last week, told Israel Today.
Meanwhile, this prophecy is being fulfilled even without the election year.
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