Housing starts fall slightly as completions soar

The greatest drop-off in starts were in Jerusalem, where the figure dropped 52.9%.

HOUSES IN the Jewish community of Efrat (photo credit: REUTERS)
HOUSES IN the Jewish community of Efrat
(photo credit: REUTERS)
Housing starts between January and March fell 2 percent year over year, though completions were up 15.6% at the same time, according to data the Central Bureau of Statistics released Tuesday.
The greatest drop-off in starts was in Jerusalem, where the figure dropped 52.9%. In the South, however, starts were up 45.3%, and in the West Bank starts nearly doubled with a 92.5% increase as compared to the first quarter of last year.
Housing completions, which are more immediately relevant to the price of housing, were up, particularly in Tel Aviv, where they rose 63.6%; in Haifa, where they rose 54.9%; and in the West Bank, where completions rocketed 218.7%.
Even with the reduction in starts, which amounted to 12,390, it seemed possible that Israel would maintain the steady pace of construction that the Bank of Israel has said is consistent with stabilizing housing prices in the long term (around 40,000-45,000 units a year).
As BoI noted in its recent interest rate discussion, home prices grew 3.8% in the 12 months ending in March, and saw the number of new homes available for sale as relatively stable.
On Tuesday, Finance Minister Moshe Kahlon signed an agreement with Haifa Mayor Yona Yahav to build 7,700 units along the sea in Haifa, as well as additional rail infrastructure.
“As a resident of Haifa and the finance minister of the State of Israel, this is a very exciting day for me,” Kahlon said.
Kahlon also expressed hopes that the port city would become the fourth major economic center in the country, and argued that any shekel the state fails to spend to boost Haifa today would amount to a tenfold need later down the line.
On Monday, the housing cabinet approved 20,000 new units in large projects through the fast-track “vatmal” system, established under the previous government.