To judge from the latest figures from the Homeless real estate website, people with homes for sale are ignoring the election promises by all the politicians to bring down housing prices, and apparently assume that the lack of political stability in Israel and the frequency with which ministers come and go will mean that the central government's impotence in the face of the housing crisis will continue.
According to the figures, asking prices for homes were stable in March, with a tendency towards continued rises. In no area of Israel was there a fall in prices across all types of homes. In four areas - Tel Aviv, Ono Valley, Bat Yam, Holon, and Modi'in - prices rose for all types of homes.
On the other hand, rents, which are much more quickly affected by the state of the economy and by the financial situation of would-be renters (since they cannot obtain the assistance of a mortgage), exhibited a declining trend. In the period 2008-2014, home prices shot up 93%, while rents rose only 43%.
Still, although the public seems to place little faith in government measures, it's worth bearing in mind that several proposals for cooling down the housing market and curbing Israelis' appetite for real estate are currently on the legislators' agenda. MK Stav Shafir has introduced a fair rent bill that, if it becomes law, will severely restrict the ability of landlords to raise rents. For its part, the Ministry of Finance is working on a series of plans for dealing with ever rising housing prices for the incoming minister. Among these are proposals to tax rents from the first shekel (rents are currently taxable only from NIS 5,000 monthly upwards), to raise the rate of tax on rents to 25% from the current 10%, and to raise rates of purchase tax on the purchase of homes not for residential purposes.
In addition, government ministries insist that the various programs that got underway during the previous Knesset designed to boost the supply of new homes, and hence reduce prices, by simplifying planning procedures are still budgeted.
Unlike other classifieds websites, Homeless charges advertisers, so that the prices quoted on it are likely to reflect the advertisers' real expectations, and so more accurately reflect the true state of the housing market.
Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2015
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