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Housing Prices Dip Slightly, Crisis Still in Effect

Following a 43% jump in three years, housing prices showed a slight decline in February. Netanyahu says it looks like a "social holocaust."
By Hillel Fendel
First Publish: 3/7/2011, 12:20 PM / Last Update: 3/7/2011, 12:38 PM

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Following a 43 percent jump in three years, housing prices showed a slight decline in February. Prime Minister Binyamin Netanyahu says it looks like a "social holocaust;" while Likud MK Carmel Shama says, "The real estate problem has become not only economic, but also political and social.”

Globes reports that its “homeless” index for February shows a drop in housing prices throughout nearly the entire country. In the Sharon region, for instance, 4-room apartments declined by 4.1%.

Three-room apartments dropped in price in nine out of 15 areas checked, 4-roomers declined in 11 out of 15, and 5-room units fell in eight out of 14. Rental prices, which rose “only” 20% over the past three years, have also begun to drop.

Early signs of the drop had been in the air, Globes reports: New construction starts are at record levels, with 70,000 apartments being built, and the new Finance Ministry taxes on 2nd and 3rd apartments have begun to make their mark.

Minister Yishai: Gov't is Threatened
The housing crisis is still major, however. “There will be a social catastrophe if we don’t manage to find lands for construction, which will lower the prices, and take care of the terrible bureaucracy,” said Interior Minister Eli Yishai (Shas) on Thursday. “I want to see this government remain stable, but what is threatening it is the housing problem. We will not be able to stand idly by if the law for subsidizing mortgages does not pass.”

Katz: But We've Been Telling You That for 2 Years!
MK Yaakov Katz, head of the National Union party and a former top Housing Ministry official, lashed out at Yishai: “Shas and UTJ [the two hareidi-religious parties], which continue to be members of this government, are directly responsible for this crime! For two years, since the government was formed, I have been crying out that we are facing a catastrophe of lack of construction. In dozens of meetings with myself, the Shas ministers and the Finance Minister, and elsewhere, I have called upon the government to immediately begin massive budgetary construction."

"Everywhere possible," Katz continued, "we declared that the Prime Minister ordered a freeze in Jerusalem and its entire vicinity – and that this is what caused the giant shortage. The hareidi public is not stupid, and Shas and UTJ can’t complain against these moves when they are part of the government that implements them!”

Mordechai Mordechai, Director of the Housing Ministry, said on Thursday, “I spoke to the Prime Minister yesterday regarding subsidizing mortgages, and he said that it looks like a social holocaust… This is a national problem, and everyone in his position must be aware of it and ask himself every day what is he doing to solve it.”

Attias: Got Land?
Housing Minister Ariel Attias (Shas) said, “The housing price jumps are not the result of the past two years, but of processes that took place years before. Ever since the end of the Russian Aliyah in the 90s and until this government was established, there was no government policy designed to speed up construction. Building the Land of Israel is holy work, and it was neglected. For these past two years, we have been trying to bring about the renewal of construction. There is a lot to do; the main thing is to increase the supply of apartments and lands.”