Despite rockets falling from Gaza, the economic slowdown and stagnation in new home sales due to the stalled 0% VAT plan, the housing market is not cooling off. Home prices rose by 0.3% in July, the Central Bureau of Statistics reports.
The Housing Price Index reached a record 348.5 points in July, after falling 0.2% in June. Since the start of 2014, home prices have risen 4%, and rose 6.8% in the 12 months ending July 2014. Since May 2007, home prices have risen 96.5%.
Real estate market sources believe that the stagnation in home sales that has yet to bring about a fall in prices will end when the uncertainty is removed regarding Minister of Finance Yair Lapid's 0% VAT plan for first time homebuyers of new homes. Lapid has promised that the Law will pass the Knesset by October 23, immediately after the holiday recess. After examinations by the Government Assessor, expected to take about 45 days, the Law should come into effect during December.
However, earlier this week Prime Minister Benjamin Netanyahu suspended progress of the 0% VAT bill, causing Yesh Atid to threaten to leave the government, and increasing the uncertainty regarding the plan.
Published by Globes [online], Israel business news - www.globes-online.com - on September 17, 2014
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