Half a year ago, three ministers in charge of the housing market in Israel presented a comprehensive plan to deal with housing prices, which at the time jumped by 9% a year.
Since then, the rate of increase in apartment prices has not only not slowed down, but has doubled to more than 16% a year.
It is doubtful whether the plan presented yesterday by Lieberman, Elkin and Shaked will succeed in reducing apartment prices.
The real estate market estimates that apartment prices will continue to rise, and when the rate of increase finally slows down it will happen not because of government housing programs, but because prices have climbed so high that the number of people interested in buying an apartment will decrease by itself.
A comparison of the plan's goals as presented at the end of October with the plan presented yesterday shows that despite the "success" of the previous plan - the goals, including the number of construction starts and the number of tenders for housing units in state lands, have not been changed or raised.
Beyond that, the intention to change the system of tenders in state lands from "all-in-one" to another method has disappeared.
Recall that three months ago it was the Minister of Finance who spoke of this method as one of the leading factors in the rise in housing prices.
Presentation of the new housing plan // Photo: Yoni Rickner
There are really no solutions yet
The Contractors Association of Land Builders is skeptical about the effectiveness of the plan.
According to Raul Srugo, these are "a variety of decisions that do not add even one apartment to the missing supply of apartments in Israel."
Srugo explains in a conversation with "Israel Today" that one of the main problems in the plan is to leave the tender system of the Israel Land Authority according to the problematic method of "everyone who wins the price".
According to Srugo, this method leads to "speculation on the ground" and fuels housing prices.
"The Israel Land Authority will continue to sell the land at the highest possible price, thus continuing to fuel apartment prices," he says.
Beyond that, Srugo believes that some of the clauses in the plan, including changing the sales law, will burden contractors and these will roll over costs to the consumer, i.e. raise apartment prices.
"The cancellation of the price of the apartment to the price of the land and the grants promised by the government for the promotion of apartments by municipalities and burdened on the contractors are expected to roll into the pockets of buyers of apartments in the free market," he said.
"The Israel Land Authority will continue to sell the land for as much as possible and thus will continue to fuel apartment prices," Photo: Yehoshua Yosef
So what should be the solution?
Srugo believes that "just flooding the market with land owned by RMI at fixed prices and addressing the reduction of regulation and bureaucracy in local authorities will lead to the construction of 300,000 apartments in at least three years that will curb housing prices.
The only solution to deal with the rise in housing prices is by increasing supply, while giving up on rising land prices. "
The bright spot that can still be found in the program is to increase the number of apartments defined in the "Lottery Apartment" program, which should increase the chances of young couples winning.
However, this is not a significant increase.
"There is no line here for the market itself. All those young people who do not win an apartment at a discount will have to build an apartment at full price."
This is a "marketing gimmick"
Meir Wieder, CEO of Wieder Mortgages, is also convinced that the plan presented is a "marketing gimmick." "We expect prices to continue to rise by another 10% this year." ".
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