The Jerusalem Post annual conference: 7 Israeli ministers will meet you there!
Housing starts down 16% in Q1
By
May 29, 2014 22:55
Jerusalem only district with increased construction, showing a 12.7% rise over the previous year.
Stone houses in Jerusalem

Stone houses in Jerusalem. (photo credit:Adi Benzaken)

Housing starts in the first quarter of 2014 were down 16 percent compared with the previous year, the Central Bureau of Statistics reported Thursday. The number of starts declined in every district except Jerusalem, it said.

The numbers will come as bad news for Finance Minister Yair Lapid and Construction and Housing Minister Uri Ariel, who in recent months have pushed a series of programs to incentivize new, quicker construction to help bring down the inflated cost of housing.



Be the first to know - Join our Facebook page.


Earlier in the week, data from the statistics bureau showed that home sales had fallen 19% in the two months since Lapid announced a controversial plan to eliminate VAT for certain first-time buyers.

Critics had warned that the plan would, among other things, freeze activity in the housing market, as potential buyers waited to see if they were eligible for the benefit.

“This is just the tip of the iceberg,” said Simcha Gridinger, a contractor and chairman of Nativ Development. “We’re talking about a decline in housing starts, even before the announcement of the VAT benefit and target pricing, and we believe that the period of stagnation now will put many contractors on the fence, not only preventing new projects from starting, but also stopping projects already being built.”

Industry sources blamed uncertainty of government policy for the slowdown, saying that builders preferred to wait and see what would happen before embarking on costly projects.

Jerusalem was the only district with a spike in starts, showing a 12.7% rise over the previous year. On Wednesday, Prime Minister Binyamin Netanyahu vowed “to continue to build in Jerusalem and to continue to develop it.”

In the Haifa district, which comprises 8% of housing, starts fell 40.5%. Starts in Tel Aviv, representing 10.9% of housing, declined 1.2%. With a total of 10,341 new starts, the first quarter of 2013 had fewer starts than the corresponding periods over the past three years.

There was a 2.6% drop in the number of dwellings completed. Jerusalem was an outlier, with a 32.6% increase, while completed homes fell 14.5% in Tel Aviv.

A slew of “umbrella agreements” that Lapid and Ariel signed with priority building areas around the country, meant to expedite the building process, seem to have had little impact so far, although they may yet put a bounce in the market further down the line.

According to the Bank of Israel, the overall construction figures for 2013 were good. Continuing construction at the same rate would eventually lead to a decline in prices, which increased 7.1% in the year to March, the central bank said.
Relevant to your professional network? Please share on Linkedin

Tags:
  • Israel
  • IAEA
  • business
  • house prices in israel
  • Prev Article
    Forex - EUR/USD gains on disappointing U.S. growth rate
    money
    Your investments: Common mistakes retirees make
    Next Article
    Share this article via
    from around the web
    Related Content
    The Teva Pharmaceutical Industries
    April 30, 2015
    Teva doubles down on Mylan, despite rejection

    By GLOBES, NIV ELIS

    Top Stories
    Israel Weather
    • 10 - 23
      Beer Sheva
      11 - 20
      Tel Aviv - Yafo
    • 13 - 21
      Jerusalem
      11 - 21
      Haifa
    • 16 - 30
      Elat
      12 - 24
      Tiberias