Housing prices have risen by an average of 17% over the past 12 months, or 15% after adjustment for inflation, according to a report by the government's Chief Appraiser. The report surveyed the price of 4-room (3 bedroom) apartments in 16 major cities.

Prices shot up most quickly in Tel Aviv, where housing was found to be 32% more expensive than it was one year earlier. A four-room apartment in the coastal city now costs, on average, 2.3 million shekels.

The cheapest of the cities surveyed was Be'er Sheva, where prices have risen by 20%, but the average cost of a four-room apartment remains relatively low at 678,000 shekels.

The other cities researched were: Petach Tikva, Modiin, Nahariya, Ashdod, Jerusalem, Ashekelon, Holon, Eilat, Rechovot, Rishon L'Tzion, Netanya, Haifa, Hadera and Hertzliya. In nine of the cities, among them Petach Tikva, Rechovot, and Netanya, the average four-room apartment costs more than 1 million shekels.

The price hike was smallest in Eilat, where the cost of housing rose by just 3% over the past year, to an average of 830,000 shekels for a four-room apartment.

MK Yaakov “Ketzaleh” Katz, Chairman of the National Union, described the sharp rise in prices as an inevitable result of policy. Ketzaleh explained, “This isn't a housing bubble. There simply are no apartments. When there are no apartments – prices go up. This the the ABCs of economics: When there's demand and no supply, prices go up.”