Housing Minister not trying to cut housing costs

Housing Minister Yoav Galant and Kulanu party are changing goals from reducing cost of housing to providing apartments to young couples.

Matt Wanderman ,

Yoav Galant
Yoav Galant
Flash 90

The Kulanu party, which campaigned on economic reforms and lowering the cost of housing, is subtly changing its goals.

Rather than lowering the cost of housing in general, it is focusing on giving benefits to young couples who do not own an apartment. As Housing Minister Yoav Galant told Army Radio on Tuesday morning, "My goal is related to supply and production, not to price. I am convinced that it will also affect the price but I have no direct control over the cost."

"When you look at the prices, there are other factors involved: the interest rate and alternative forms of investment and more" he explained. "I believe in the rules of free competition and the free market, and I think that when you reduce apartment prices by 25 percent of what they are now, it will have an effect. How much of an effect? I don't know, and I don't want to make any predictions."

This is a strong break from the party's previous stance, as summed up by the head of the housing department in the Finance Ministry, Avigdor Yitzhaki. "If, by the end of 2017, the cost of housing does not drop by 15 percent, I'm going home," he promised.

Party leader Moshe Kahlon similar told voters that "there's a big enough cushion for banks and financial institutions to reduce the prices, I think by 20 to 25 percent. It won't be a problem at all."

Now, however, Kahlon is also changing his tune. He was interviewed on Army Radio last week and claimed, "We don't want to create a crisis anywhere, not in agriculture, not in insurance and not in banking. Nothing should return to how it was 10 years ago."

Instead, Kulanu is pushing for increased building in order to reduce the number of young couples who do not own an apartment by 30 percent.