Building starts up, but completions drop in 2015

The fact that more units are taking off and are in the pipeline should eventually ease the pressure that's been pushing housing prices ever-higher.

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March 23, 2016 18:30
1 minute read.
A Palestinian laborer works on a construction site in the new Palestinian town dubbed Rawabi

A Palestinian laborer works on a construction site in the new Palestinian town dubbed Rawabi or "The Hills", near the West Bank city of Ramallah. (photo credit: REUTERS)

 
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In mixed news for the country’s overheated real estate market, the Central Bureau of Statistics on Wednesday revealed that housing starts rose 3.9 percent in 2015, but completions dropped 2.8%.

By the end of the year, however, 99,400 units were in the process of being built, the highest number since September 1997.

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The fact that more units are taking off and are in the pipeline should eventually ease the pressure that’s been pushing housing prices ever-higher.

The news will also be welcomed by Finance Minister Moshe Kahlon, who has been pushing aggressively to start new housing projects in an effort to make apartments more affordable.

Still, the fact that completions were down might help explain why rises continued to rise in 2015, by around 8% according to some measures.

The Bank of Israel has long argued that the high price of housing results from a supply shortage, though it notes that low interest rates have played a part as well.

In 2015, the number of new starts amounted to 47,750, near the range that BOI has said is necessary to eventually stabilize prices. The figure was higher in 2013, at 47,848, but dipped in 2014 to below 46,000.



On Wednesday, an analysis by Bank Leumi said the figure was near the lower limit of what the country needed.

Starts, the analysis said, would likely jump above 50,000 in the coming years, and would take time to start affecting prices.

The greatest increase in housing starts was in the South, which saw 47.5% growth over the previous year.

Just about a quarter of all the new starts were in the Center, where demand is highest, though in that region, the figure was 11% lower than in 2014.

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