The Association of Contractors and Builders in Israel (ACBI) dismissed the Ministry of Finance's monthly Red Lights report, which asserts that the median home price fell 1.4% in May. "The figure does not reflect what is happening on the ground, and contradicts figures by the Central Bureau of Statistics," said ACBI director general Yossi Gordon in a statement.
Gordon added, "Every month since the beginning of the year, the Ministry of Finance reports a drop in prices. The true figures are published immediately afterwards by the Central Bureau of Statistics, which show a rise in prices." Gordon cites Central Bureau of Statistics figures as showing that prices for new homes rose 6% in January-April 2010.
Gordon says that home prices in high demand areas in central Israel continue to climb, and warns, "So long as there is no practical handling of the shortage of new apartments in demand areas, apartment prices in Israel will not fall.
"The government has repeatedly failed to deal with the shortage of new housing. The planning reform is stuck, there is no increase in housing starts despite the land marketing policy of the Ministry of Housing and Construction, and, worst of all - the government intends to deport foreign workers, which will reduce the country's ability to create an inventory of apartments."
This would not be the first time that the Ministry of Finance and the Central Bureau of Statistics home price figures go in different directions, as the ministry examines the median price and the Central Bureau of Statistics looks at the average price.
Published by Globes [online], Israel business news - www.globes-online.com - on June 29, 2010
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