After the Jewish holidays, just before the government housing cabinet has promised to flood the market with land for construction of tens of thousands of inexpensive subsidized apartments, a new survey shows that most Israelis do not believe in the Ministries of Finance and Housing and Construction's new programs for solving the housing crisis, and believe that housing prices will continue climbing.
The survey, commissioned by "Globes" and conducted in recent days by Mutagim Research, included 501 respondents in a national representative sample of the Hebrew-speaking adult Jewish population in Israel. The survey examined the level of public confidence in the Ministry of Finance's ability to halt the rise in real estate prices and public expectations concerning housing prices.
The survey asked, "In your opinion, what will happen to real estate prices in the coming year in comparison with this year's prices?" In its latest price index update, the Central Bureau of Statistics reported that housing prices fell 0.4% in August, after rising continuously for an entire year.
Despite the latest figures, however, 80% of the respondents predicted that prices would continue to rise, 32% of whom who said that the rise would be steep and 68% who said it would be moderate. A breakdown by gender showed that men were more optimistic about future housing prices: 60% of them said prices "would increase slightly," compared with 49% of women who gave this answer. 21% of men in the survey said that prices would rise sharply in the coming year, compared with prices in the current year, compared with 29% of women.
The survey also provided a breakdown by the respondents' age. Despite the experience gained by older people, the distribution of their responses did not differ as much as might have been predicted. The most significant difference was observed in the proportion saying "prices would fall slightly. 6.2% of those aged 18-34 gave this answer, compared with 6.4% among those aged 35-54 and only 1.7% of those aged 55 or older. The difference in responses may indicate that Israelis' interests affect their expectations.
Almost 70% of Israel own their home, with a higher percentage among the older population, which bought their dwelling(s) before the big boom in real estate prices in recent years. It may therefore not be surprising that a minimal proportion of those aged 55 or older, almost all of whom own a dwelling, does not expect housing prices to fall any time soon. In contrast, among younger people, many of whom are waiting for a drop in prices that could enable them to become housing buyers, hope and optimism are more prominent.
The survey found a completely different situation with respect to economic status, with lower-income people being more pessimistic. 37.1% of respondents with lower than average income predicted that housing prices would rise steeply, compared with 23.4% of those with average income and 20% of those with higher than average income.
Despite the large price gaps in Israel between the central region and the outlying areas, a breakdown of the responses according to region of residence shows no significant differences. Mutagim CEO Avi Peer said, "It can be seen that geographical location has a slight effect on responses to the question of whether housing prices will go on rising. For example, 82% of greater Tel Aviv residents believe prices will increase, compared with 75% of residents of the Sharon region and the southern inland plain, 20% of whom believe that prices will remain stable over the coming year."
Published by Globes [online], Israel business news - www.globes-online.com - on October 28, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015