(photo credit: ARIEL BESOR)
Construction and Housing Minister Yoav Galant has admitted that, despite his best efforts, home prices will continue to rise. Galant made the comments in an interview published in Yediot Aharonot on Sunday.
“The goal I’m aiming for is to stabilize prices within a year, and to lower them in a year or two years to bring them down as much as 5 percent,” the paper quoted him as saying.
Prices, he said, should not come down dramatically. “I don’t think they need to fall 30%,” he stated.
Filling a the apartment shortage of 60,000-70,000 units will take time, he said, because Israel can only build around 45,000 units a year.
The Bank of Israel noted in its interest rate discussion last week that housing prices were up 4.4% in the 12 months ended in June, faster than the 3.4% rate at which they grew the previous year.
“The number of new homes sold in June reached a record high — about 2,500 — and the stock of homes
available for sale remains relatively high although the level continues to decline,” the central bank said.
Although this news may be bad for young couples looking to purchase their first homes, some, such as real-estate developer Shlomo Grofman, praised Galant for squaring with the public.
“In recent years, we have become used to statements by ministers and even prime ministers promising that prices will come down immediately, statements that do not recognize the market and its depth and caused those who believed them to pay more for apartments later,” he said.
It is preferable that the public understand that waiting to purchase an apartment will result in paying more, Grofman said.