After years of decline in building starts for three-room apartments, Ministry of Construction and Housing figures for building starts in the first quarter of 2015 show an increase in the number of small apartments started. In addition, adjusted Central Bureau of Statistics figures for the first half of 2015 also indicate a surge in construction of these apartments.
According to the Ministry of Construction and Housing figures, construction began on 680 three-room apartments in the first quarter of the year, 5.5% of all the building starts in the quarter. Three-room apartments started totaled 1,764 in 2014, only 4% of all building starts that year, an average of only 441 per quarter, 239 (50%) fewer than the number in the first quarter of 2015.
The Central Bureau of Statistics' adjusted figures for the first half of 2015 show that construction of no fewer than 1,871 three-room apartments began in January-June., including 1,191 three-room apartments in the second quarter, 57% more than in the first quarter. The first half total is more than the 1,764 three-room apartments begun in all of 2014. The standout cities in beginning construction on three-room apartments were Tel Aviv-Jaffa, Jerusalem, Ramat Gan, and Beit Shemesh.
It is important to stress that it is too early to tell whether a full-scale trend is involved, and whether the increase in building starts of three-room apartments will continue. The fact that the proportion of three-room apartments among total building starts has exceeded 7% for the first time since 2011 (and may further increase, because the figure is for only six months), however, is likely to indicate a change in the supply of small apartments. The proportion of three-room apartments in total building starts was 4.4% in 2013 and 4.1% in 2012.
In 2011, the Ministry of Internal Affairs planning department decided to require that the proportion of small apartments in every urban building plan approved by the planning authorities be at least 20%. "In the framework of a socioeconomic policy seeking to narrow gaps in the population in order to bolster the capabilities and supply the various needs of diverse populations, and given the negative consequences of the worsening housing shortage, it was decided to instruct the planning authorities to ensure a diverse composition of housing units in discussions of new plans submitted for approval," the Ministry of Internal Affairs director general wrote in a circular sent to the planning and building commissions in May 2011. It is possible that now, four years later, this instruction is finally beginning to show results.
At the same time, it is premature to celebrate the increase in the number of three-room apartments, because together with the building starts, almost every venture in National Outline Plan 38 getting underway involves expansion of existing apartments in old buildings - a large proportion of them being three-room apartments. This means that three-room apartments are becoming four-room apartments, thereby accelerating the disappearance of small apartments from the general stock of apartments.
Published by Globes [online], Israel business news - www.globes-online.com - on October 8, 2015
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