Finance minister scorns Netanyahu’s call to up and buy homes
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Finance minister scorns Netanyahu’s call to up and buy homes

After PM tells crowd to go out and buy apartments, Moshe Kahlon says few can afford current high prices

Stuart Winer is a breaking news editor at The Times of Israel.

Finance Minister Moshe Kahlon speaks at a conference on how to develop northern Israel, in Ma'alot-Tarshiha, December 26, 2016. (Meir Vaknin/Flash90)
Finance Minister Moshe Kahlon speaks at a conference on how to develop northern Israel, in Ma'alot-Tarshiha, December 26, 2016. (Meir Vaknin/Flash90)

Finance Minister Moshe Kahlon on Tuesday derided a call by Prime Minister Benjamin Netanyahu for more people to buy homes in the north of the country, saying that for it to happen prices need to come down as few people can afford to become homeowners in the current market.

Kahlon’s comments came a day after Netanyahu pushed for home-ownership during a ceremony to roll out a NIS 15 billion pan-ministerial development plan for the north of the country.

The finance minister has made the curbing of skyrocketing housing prices a cornerstone of his election campaign.

His Kulanu party controls the Finance Ministry, Housing Ministry, Israel Land Authority and the Planning Administration responsible for zoning.

Speaking at a ceremony in Jerusalem to mark the induction as employees into local authorities of some 90 formerly contracted workers, Kahlon spoke about Netanyahu’s call for action.

“I also want people to buy apartments, but at reasonable prices and not like it is today when only a few can allow themselves that,” Kahlon said. “When there are apartments but the prices are high, only a few can buy — and I want everyone to buy.”

Prime minister Benjamin Netanyahu speaks at a conference on how to develop Northern Israel, in Ma'alot-Tarshiha, December 26, 2016. (Meir Vaknin/Flash90)
Prime minister Benjamin Netanyahu speaks at a conference on how to develop Northern Israel, in Ma’alot-Tarshiha, December 26, 2016. (Meir Vaknin/Flash90)

On Monday, Netanyahu told a crowd in the northern mixed Arab-Jewish municipality of Ma’alot-Tarshiha that he had tried to counsel people to buy homes years ago.

“A few years ago, and my friends the ministers remember this, we said, and I said in the south, “buy apartments — not only in Beersheba, buy apartments also in Dimona, in Yeruham, buy apartments,” Netanyahu said, referring to three towns in the south of the country. “There were those that listened and acted, and there were those who didn’t act.”

“Now, I say to all of the residents of the north, the young people in particular. Buy apartments, invest in the Galilee, invest in the Galilee, that is the future,” he added at the event to roll out the development plan for the north.

Kahlon was also at the event as was Interior Minister Aryeh Deri who doubles as head of the Ministry for the Development of the Negev and the Galilee.

The plan will see billions of shekels will be invested in health serviced as well as research, industry and local economies, Netanyahu said.

“The most important thing is to see migration back to the Galilee, it is actually happening now in the south and it will happen in the north,” he noted.

Illustrative photo of new apartment buildings under construction in the central Israeli city of Ra'anana, on July 25, 2015. (Hadas Parush/Flash90)
Illustrative photo of new apartment buildings under construction in the central Israeli city of Ra’anana, on July 25, 2015. (Hadas Parush/Flash90)

Housing prices in Israel have risen steadily over the last decade, with many young families saying they have been priced out of home ownership.

Bank of Israel Governor Karnit Flug said Tuesday that Israeli policy makers should not seek a magic bullet to fix the crisis.

“To deal with the housing crisis doesn’t need miracles, just an intelligent policies based on quality research that supports the policies,” Flug said, according to the Ynet news website.

“The process of creating supply that will answer the demand is long and complicated, and the government has a central role, being the owner of most of the land and responsible for the whole process of planning and licensing, both in terms of regulatory policy, in various aspects, and tax policy,” she said.

In June 2015 Kahlon on announced what he called the first phase in a plan for reducing Israel’s housing prices.

Provisions included financial incentives to turning office space into residential homes, breaking up apartments into smaller units, expanding the number of people who will be eligible for state land allocations and the expanded availability of discounted land for first-time home buyers.

Further ideas included implementation of government recommendations for developing minority towns, encouraging rural development and extending “added incentives to projects in the periphery,” a reference to development towns that have been economically marginalized and where rates of poverty are relatively high.

Times of Israel staff contributed to this report.

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