There were 39,500 housing starts in the fourth quarter of 2010 (annualized trend figures), compared with the 39,000 housing starts in 2010 as a whole, says Bank Leumi in its weekly survey. The bank expects the increase in housing starts to continue.
The bank cautions, however, "In view of the fairly long time needed to increase the housing inventory, the increase in housing starts will only ease the rise in prices. The interest rate hikes and regulatory measures taken by the Bank of Israel and Ministry of Finance could have a greater effect on easing pressures on home prices in the short term, by reducing demand."
The bank adds, "The ongoing rise in commodities and fuel prices are also expected to contribute to the trade deficit. This trend could somewhat weaken the forces acting to appreciate the shekel."
Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2011
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