Steinitz: Housing prices likely to drop by end of year

Finance minister says gov't trying to close a 10-year delay over housing issue, people who think problem can be solved quickly are "mistaken."

July 24, 2011 09:32
1 minute read.

Finance Minister Yuval Steinitz 311. (photo credit: Courtesy: Ministry of Finance spokesperson)

Finance Minister Yuval Steinitz on Sunday morning told Israel Radio that the government has been discussing the housing shortage for almost two years and people have already begun to feel the effects of cost regulations in housing across the country.

Steinitz estimated that housing prices will drop by the end of 2011 or early 2012.

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The finance minister's comments come after thousands gathered in central Tel Aviv Saturday night for a rally against soaring housing prices and the high cost of living.

The rally, which was the country’s biggest social-issues demonstration in years, brought together people from tent cities across the country, who have been camping over the past week, as well as tens of thousands of other Israelis.

Amid increasing protests against the housing issue, Steinitz told Israel Radio that the government is trying to catch up on an almost 10-year delay in the housing market, and whoever claims that the problem can be solved within a few months is "mistaken."

The finance minister also expressed disappointment over opposition the government to housing reforms that would shorten the procedures for obtaining approval for new housing projects.

Steinitz denied in the interview reports of tension between himself and Prime Minister Binyamin Netanyahu, calling the reports "laughable."

Labor MK Isaac Herzog, also speaking to Israel Radio, said Steinitz's comments were "fishy" and that the government must intervene immediately in the apartment rental market and in building procedures.

According to Herzog, Netanyahu and Steinitz have long "ignored the warning alarms" over the housing issue, some of which he himself sent.

Ben Hartman contributed to this report.

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