Apartment prices have risen by 13% in the last year

As housing crisis intensifies, Liberman eyes new plan aimed at lowering prices

Initiative will see state determine max price for land, with bids granted to contractors who offer lowest prices, and a commitment to finish building within 3 years

A construction site of new residential buildings in a new neighborhood in Beer Yaakov, March 26,2020. (Flash90)
A construction site of new residential buildings in a new neighborhood in Beer Yaakov, March 26,2020. (Flash90)

Finance Minister Avigdor Liberman is working on a new plan aimed at addressing Israel’s ever-intensifying housing crisis, against the backdrop of new data showing further dramatic rises to home costs.

The plan is an updated version of one presented in October, which the Finance Ministry has realized is no longer sufficient given the deteriorating housing market, according to several reports in Hebrew media.

Channel 12 reported that the plan will include three major points: the state will determine the maximum price for land, based on geographical area; contractors who offer the lowest prices will win bids for tenders; and those contractors will have to commit to finish building within three years.

Previous plans saw the state grant tenders to contractors who proposed the highest prices — thus fattening state coffers while raising prices for home buyers. The new plan will see the state lose some revenue in the hopes that the market will adapt to the consumer’s benefit.

Liberman will discuss the plan with senior officials in his office along with municipal leaders, Channel 12 said, noting that the proposal is likely to be further adapted.

The plan was initiated by Liberman after he reviewed the Central Bureau of Statistics’ latest housing figures released on Tuesday.

Screen capture from video of Finance Minister Avigdor Libeman at the opening of a meeting of the ministerial socioeconomic committee, February 15, 2022. (YouTube)

According to the CBS, the consumer price index rose by 0.7 percent in February 2022, topping off a 3.5% increase over the last year, which is 0.5% above the Bank of Israel’s target.

Apartment prices rose by 13% in the last year, with an increase of 2.1% in January alone. The total sum of mortgages taken out in February stood at NIS 11 billion ($3.39 billion), the CBS said.

Most Popular
read more: