Israeli housing prices continue to break records, up 15.9% over last year

Israel’s housing prices continue to rise to record levels despite a recent slowdown in purchases, the Central Bureau of Statistics announced Friday, jumping 15.9% over the past year.

Over the month from April 2022 to May 2022, apartments rose on average by 1.4%, compared to the previous month. This figure includes both new and second-hand properties.

This puts prices up nearly 16% compared to the period from April 2021 to May 2021, the highest annual price increase in housing prices in a decade.

The 1.4% monthly rise compares to increases of 0.9% from March to April, and were up across the country.

In Tel Aviv, the price rise of 1.9% was the steepest in the city in the last three months. Even in areas perceived as more peripheral, meaningful price rises were seen with numbers up 1.4% in the North and 1.2% in the South.

When comparisons are made with transaction values over the same period last year (April to May 2021), double-digit price increases were recorded in all districts: Central at 19.5%, Tel Aviv at15.3%, Jerusalem at14.6 %, Haifa at14.4%, South at 14.2% and North at 12.8%.

The sharp rises come despite government-subsidized housing programs, which are doing something to help restrain the price rises in newly built homes — accounting for 28.5% of sales (April to May 2022) compared to 25.7% (March to April 2022). When these sales were excluded, the price of new homes rose by 1.8% over the month. Over the year, new homes rose in cost by 18.7% (April to May 2022 compared to April to May 2021).

The rise in housing prices is expected to also cause a corresponding rise in rents, adding to the rising cost of living, with inflation standing at 4.4% for June, and the cost of consumer goods rising. 

The high cost of living, including house prices, will likely be a key issue in the upcoming November election.