Home prices up 1.7% in January

This was the biggest monthly gain in home prices since June 2010.

The real estate market is continuing to heat up. Home prices rose by 1.7% in January 2013, the biggest monthly gain since June 2010, according to Central Bureau of Statistics data published on Friday. The Bank of Israel takes account of the Central Bureau of Statistics' Prices of Dwellings Index when deciding monetary policy.

January was the seventh consecutive month in which home prices rose; the cumulative gain was 6.8%. January was also the third consecutive month in which home prices rose by 1% or more: the rise was 1% in November 2012 and 1.1% in December.

At the Bank of Israel Monetary Committee in late February, members expressed concern about the rise in real estate prices. The minutes of the meeting, published last week, state, "Home prices have continued to increase at a rapid rate in recent months. Committee members emphasized that monetary policy acts primarily on the demand side, while the required steps are supply-side steps that have the ability to lead to an increase in the inventory of homes while reducing prices, and such steps are not expected before the new government is constituted and the budget is passed."

Home price rose by 8.5% in the 12 months through January, and have risen by 77.4% since the surge in prices began in May 2007.

Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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