The bank does not expect any change in the low inventory of homes for sale, or in interest rates.
"Home price may rise by 5-10% in 2011," says Bank Leumi in it macroeconomic survey. Despite efforts to increase the supply of apartments, the bank believes that demand will still outstrip supply in the near future.
Bank Leumi says that the Israel Land Administration's (ILA) increased marketing of land for homes, combined with incentives to expand housing starting will boost housing starts from the current 35,000-40,000 a year to 40,000-45,000 a year in 2011-12. Nonetheless, this will not suffice to meet demand.
Bank Leumi says that the underlying factors driving home prices will not change anytime soon. It does not expect any change in the low inventory of homes for sale, or in interest rates, the two factors that will continue to boost home prices, albeit moderately.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2010
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