There were just 8,797 housing starts in the second quarter of 2013, down 26% from the nearly 12,000 housing starts in the preceding quarter, and down 20% from the corresponding quarter of 2012, the Central Bureau of Statistics reported today. The figures indicate that steady rise in housing prices, caused by the housing shortage that real estate executives constantly warn about, will not improve.
The number of housing starts in the second quarter is the lowest since the first half of 2009. Except for the third quarter of 2012, housing starts exceeded 9,000 units every quarter.
A breakdown of housing starts by type show that the biggest drop was in housing starts of apartment buildings, which fell to 5,037 housing units in the second quarter from 7,656 units in the preceding quarter and 6,727 units in the corresponding quarter.
While housing starts figures are at a nadir, housing completions reached a five year high of over 11,000 units in the second quarter. The number of housing completions has been 7,000-10,000 units per quarter since early 2008.
Housing Ministry: Labor shortage is to blame
The Ministry of Housing and Construction attributes the drop in housing starts to labor shortage in the construction industry and the slow pace of the issuing of building permits by municipalities.
"The number of apartments under construction reached a 16-year high in 2013, at 87,300 apartments at the end of June," says the Ministry of Housing. "In view of the positive figure of the large number of apartments under construction in 2013, and the extensive construction, the labor shortage in the construction industry stands out as the barrier barring the increase in housing starts.
"In addition, housing starts reflect the pace at which municipalities issue building permits. The decline and delays in issuing building permits, together with the labor shortage in the construction industry, is the reason for the drop in housing starts."
The ministry concludes, "To increase the number of housing starts, the Ministry of Housing and the Israel Land Authority are acting to increase the marketing of land for residential construction, and municipalities should prepare for this. Measures are also underway to increase the labor supply and to deal with other barriers, such as the credit crunch for real estate."
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2013
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