New home prices rose 6% between the first quarter of 2012 and the first quarter of 2013.
Home prices are still rising. Ministry of Housing and Construction figures for the first quarter of 2013 show that new home prices rose by at least 6% (in real terms), compared with the corresponding quarter of 2012, and that second-hand home prices rose by 5% (in real terms). New home prices rose by 3% (in real terms), compared with the preceding quarter, and second-hand home prices rose by 1% (in real terms).
Home prices have risen nationwide by tens of percent since 2007, except for a few minor corrections. Many sources believe that the cancellation of the betterment tax exemption and a new purchase tax on people moving upmarket could freeze many transactions in the coming months. The immediate effect will be a rise in rents, and the severe shortage in rental housing is liable to worsen.
The Ministry of Housing is aware of the problematic situation shown by the new data. Top ministry officials, Minister of Housing and Construction Uri Ariel, and the new director general, Shlomo Ben-Eliahu, say that the ministry will propose to the housing cabinet an extraordinary measure to stabilize home prices. The nature of the measure was not disclosed.
Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2013
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