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Cost of new apartments rising faster than at any point in past decade

New homes buck any sign of housing market slowdown — up nearly 22% from last year

A construction site of a new residential neighborhood in Kfar-Yona in the Sharon area, August 8, 2019. (Gili Yaari / Flash90)
A construction site of a new residential neighborhood in Kfar-Yona in the Sharon area, August 8, 2019. (Gili Yaari / Flash90)

The price premium on new housing and its rate of increase is continuing to grow month by month. This means that according to the Central Bureau for Statistics (CBS), the cost of new housing, excluding government-subsidized homes, went up 21.8 percent between March 2021 and April 2022.

More detailed numbers from the CBS show that an increasing number of new homes being sold are the result of government programs, such as the Target Price scheme (Mehir Matara) and its predecessor the Price per Occupant scheme (Mehir L’Mishtaken).  These schemes reduce the price of property below market value in different ways.

As The Times of Israel reported last week, a rise across the housing market (i.e., new and second-hand property) of just 0.9% from March to April 2022 represents a smaller increase than in previous months. That takes annual rises to 15.4%, down from the 16.3% reported in May. Nevertheless, this still shows an average increase of 4.3% over the last quarter of 2022, and therefore the steepest annual rise in a decade.

In March-April, while prices fell back a little in Jerusalem (down 1.1%), Tel Aviv saw larger price rises than in either of the previous two months, up 1.6%. Comparing price rises from March-April with the same period last year, every part of the country saw double-digit price increases, with the largest increases of the year — up 18.3% — in the central region of the country.

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