BoI: Land prices up 60% in central Israel in 2006-11

Apartment prices in central Israel also rose 60% in 2006-11. In the periphery land prices rose 15% and housing prices rose 50%.

The price of land per apartment in central Israel rose 60% in 2006-11, the same as the rise in housing prices, states the Bank of Israel Research Department in a study published today. However, in the periphery (the northern, Haifa and southern districts), the price of land per apartment rose 15% in this period, but housing prices rose 50%.

In absolute terms, the price of land per apartment in central Israel (excluding VAT) rose by more than NIS 150,000 in 2006-11 and housing prices jumped by more than NIS 500,000. In the periphery, the price of land per apartment rose by NIS 10,000 and housing prices rose by more than NIS 250,000. The price of land peaked in 2011, at NIS 450,000 per apartment in central Israel and at almost NIS 100,000 in the periphery, about one-third and one-tenth of the price of a typical 3.5-4 room apartment, respectively.

"The analysis therefore shows that in the center of the country, the increase in land prices is in conjunction with increases in home prices - a direct result of high demand for housing and limited supply of land for construction. In contrast, in the periphery, the correlation is weaker and it is easier to moderate the increases in home prices through expanded marketing of land, since the Israel Land Administration owns a relatively large portion of the unbuilt land, and has a greater ability to market it within a short period of time than it does in the center of the country also due to fewer planning limitations," says the Bank of Israel.

The Bank of Israel also found a positive correlation between residential land prices and the rate of land that the Israel Land Administration sold as a share of what it marketed. In 2010-11, when the Israel Land Administration greatly increased land sales, 94% of the land it marketed in central Israel was sold, but the proportion of land sales in the periphery was lower.

Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Your name
Please insert your name
Content
Hyperlink in a new window Hyperlink Right Left underline italic bold Bulleted List Ordered List Face1 Face2 Face3 Face4 Face5 Face6
Your comment

Thanks
You comment was recieved and soon will be published.
In posting comments, I agree to abide by the Terms of Use
Globes encourages lively and frank debate, but posts that the editors consider merely abusive or otherwise inappropriate will be removed. Report inappropriate content
Thank you for posting your comment, which will be reviewed for publication.
Loading Comments...load
Load more comments
Twitter Facebook Linkedin RSS Newsletters