(photo credit: Alejandra Goldenfen)
Israel’s cost of living exceeds the average in Organization for Economic
Co-operation and Development (OECD) countries in housing and the cost of food
and automobiles, according to a new report by the TAUB Center for Social Policy
Overall, the study states that the cost of living in Israel has
gone from being 14 percent lower than the OECD average in 2005 to 9% higher than
the average in 2008.
According to the report, average housing prices in
Israel are higher than prices in 174 out of the 175 largest cities in America,
with only New York City being more expensive. In addition, Israelis pay on
average 7.7 years of salary to purchase a home, as opposed to five in England
and 2.9 in the United States. Israelis also pay significantly more than
residents of OECD countries Australia (6.8 years), New Zealand (5.7), Ireland
(3.7), and Canada (3.7), the report states.
The study does not measure
housing prices in exact dollar amounts; rather, it takes the average house price
and the average monthly salary in each particular country to determine how long
it would take an average wage-earner to purchase a house. It also does not take
into account other cost of living issues that come into effect when determining
the amount of time it would take to purchase a house.
TAUB Center’s report recommends that the high housing prices in Israel be dealt
with by not only addressing the symptoms of the issue but in pursuing widespread
reforms in the operations of the Israel Lands Authority, which owns some 90% of
the land in Israel.
The report also calls for widespread investment in
building student dormitories, and for the state to increase taxes on
foreign-owned property in Israel, which it says have contributed to the increase
in housing prices in recent years.
It’s not only housing prices that are
significantly higher in Israel, according to the report. It also states that in
2005 the prices of cheese, milk, and eggs are 6% higher in Israel than the
average across the OECD and that by 2008, these staple goods were 44% higher
than the OECD average.
Automobiles are also significantly higher, the
report finds, with the average price of a car in 2005 being 46% higher in Israel
and 70% higher in 2008. These prices, unlike housing prices, were gauged by the
report in real dollar amounts.
The Taub Center report also found that the
prices of certain goods have risen dramatically, even in just the course of a
few years. For instance, while in 2005 food prices in Israel were 16% lower than
the OECD average, only three years later, in 2008, they were 16% higher.