Housing Crisis Continues: Prices Up by Another 8%
The Bank of Israel has published its report on monetary policy for the second half of 2013. Among other things, the report reveals that housing prices have continued to rise, going up by eight percent over the 12 months concluding in October 2013.
Both the number of housing sales and the number of mortgages granted remained relatively stable at high levels, the bank reported.
The report of a further increase in housing prices follows the revelation last year that housing prices had doubled in less than a decade. From 2005 to the end of 2012, the average price of housing went up by 100%, activists say.
The Bank of Israel reported that the Consumer Price Index rose by roughly 0.7 percent in the year ending in October 2013. The modest increase came out in the middle of the range set as the inflation target for the year.
The increase in the GDP remained on the low side in 2013, as in the two previous years, bank officials said. Exports remained on the low side, due to low demand overseas and to the shekel’s strength compared to other currencies.
However, public and private consumption, and the beginning of production of natural gas, bolstered the economy and allowed growth to continue, albeit at a modest pace. Unemployment decreased over the course of the year.
Ministers and activists have warned that the government must act to bring down the price of housing. Finance Minister Yair Lapid said in December 2013 that the high cost of housing has become a “strategic threat” to Israeli society, and accused the government of failing to create policy to address the issue.
The rise in prices has affected some regions more than others. Jerusalem representatives have warned that the pace of construction in the capital is "a drop in the ocean" compared to demand, while youth from Samaria (Shomron) have reported fears that they will be unable to find a home near their families for any price.