Housing prices continue upward climb, state report shows

8% jump seen over last year, but slight leveling off of upward trend since late 2015; average Tel Aviv cost closes in on NIS 3 million

By ToI Staff 23 May 2016, 4:53 pm 0 Edit

Illustrative: A housing construction site in Jerusalem, October 27, 2013. (Yonatan Sindel/Flash90)

The high cost of housing in Israel continued to rise into the first quarter of 2016, according to a new government report, continuing a trend of galloping real estate prices despite recent political promises to rein in the market.

The price of four-room apartments rose by 1.6 percent in the first quarter of 2016, and a total of 8% in the last year, according to figures released by the Chief Government Appraiser’s office Sunday.

The data of the report was based off of the average price of four-room apartments in 16 Israeli cities, including new and and already built residences, the Israeli daily Globes reported.

The cities that saw the highest rise in housing prices over the last quarter of 2015 were: Eilat (5%) Tel Aviv (4%), Netanya (4%), Modi’in (4%) and Ramle (4%).

Jerusalem saw no increase since the last quarter and four cities saw a decrease in price: Holon (-3%) Ashdod (-2%), Kfar Saba (-2%), and Haifa (-1%).

The city with the highest average cost for a four-room apartment was Tel Aviv, which came to a princely NIS 2,961,000 ($764,316). The White City average was nearly 600,000 NIS higher than the second-most expensive city, which was its tony suburb Herzliya at NIS 2,337,000 ($603,275).

Finance Minister Moshe Kahlon. (Yonatan Sindel/Flash90)

Bargain hunters could make their way south to the Negev capital of Beersheba, where a four-room apartment fetches NIS 1,049,000 ($270,790), the cheapest of the 16 cities surveyed.

While prices have continued to rise, they showed a slight leveling off, with the 1.6% jump in the first quarter being dwarfed by a 2.7% increase in the preceding quarter.

The high cost of housing has become a central political issue in the country, with young families claiming they are being priced out of home ownership or even rentals in the economic center of the country.

Finance Minister Moshe Kahlon, who entered office with promises to cure Israel’s real estate woes, has enacted a series of affordable housing schemes, including a program in which developers receive land at cut-rate prices and sell apartments at a discount to qualified first-time buyers.

Tal Aldroti, the chief state appraiser, wrote in the report that it was too early to see the influence of the program on the market.