Tent City Rally (Ben) 311.
(photo credit: Ben Hartman [file])
The Knesset Research and Information Center published a lengthy report on the housing situation on Wednesday in which it said that “the government has lost its long-term vision on everything in connection to housing and construction policy.”
It stated: “In the past few years this has been pronounced by government decisions and steps that are not in line with their stated goals – and even have the opposite effect of what is required. A continuation of this trend is likely to cause public resentment, a widening of the socioeconomic gaps and support for emigration.”
The 31-page report was requested by six members of Knesset: Dov Khenin (Hadash), Shelly Yacimovich (Labor), Yoel Hasson (Kadima), Nitzan Horowitz (Meretz), Orly Levy-Abekasis (Israel Beitenu) and Miri Regev (Likud).
The report compared Israeli housing policies to those of the United States, United Kingdom, Germany, Sweden and Australia, and found that their governments are involved in the housing market and have acted to moderate market fluctuations.
Such moderation is, among other things, seen in construction subsidies for contractors and tax benefits in return for offering cheap housing for purchase and rentals to young couples, the report said.
In Germany, for example, housing subsidies and public housing budgets have helped fulfill the promise of affordable housing, and have brought stability to the market, it added.
In contrast, successive Israeli governments have decreased their involvement in the housing market in the past decade, it said.
“This has worsened the cyclical nature of the housing market, including the price decrease from 2000 until the end of 2007, and the sharp price increase from December 2007 until today.”
The report emphasized that “the price increase of the past two years has brought about a sharp increase in state revenues from real estate taxes.”
Meanwhile, Bank Hapoalim’s Mishkan Home Buyers Index, which monitors the
financial conditions affecting home buyers, dropped to a level of 125.8
points in June – an eight-year low.
The drop reflects deterioration in the situation of home-buyers,
reflected by the continued increase in house prices, and in the increase
in mortgage interest rates, the bank said.
Home prices have risen by 13.7 percent in nominal value in the past 12
months, and by 9.7% in real value, Hapoalim data showed. Since 2007 they
have risen by 63% in nominal value and by 41% in real value.
The average 20-year interest rate for home loans rose by 0.11% in June to 3.66%, according to the Bank of Israel.