The Property Index Overview of European Residential Markets (which includes Israel) published by accounting and financial consulting firm Deloitte has found that Israel ranked as the most expensive country to buy a new home in 2022.
The price of new homes in Israel in 2022 climbed to €5,701 per square meter, 16% more than in Austria, which was ranked in second place, 19% more than Germany, 23% more than France, 39% more than the Netherlands and 43% more than the UK.
This was despite the fact that the rate of building starts recorded in Israel last year was higher than that of European countries. The head of real estate at Deloitte Israel warns that the declines in building starts recorded over recent months will result in further price increases.
The price of new homes in Tel Aviv in 2022, Deloitte found made it the most expensive city in Europe. Prices of new homes were €14,470 per square meter, 1% more expensive than Paris, 29% more expensive than Munich and 60% more expensive than London.
Deloitte Israel partner and head of the real estate industry Doron Gibor explains that the data compares 70 square meter apartments but hardly exist as new apartments in Israel. Therefore, the comparison is somewhat theoretical, although even if they were to stick to the price per square meter for apartments that are common in Israel (about 100 square meters), Israel and Tel Aviv would have remained in high places.
Gibor says, "The statistics also do not include the inter-regional disparities that exist in the various countries. In Austria, for example, which came in second place in the average price of apartments, the price differences between the different cities is relatively low. Whereas the ratio between the prices of apartments in Tel Aviv and the average prices in the country as a whole is three times, which indicates that there are also cheap cities here. The difference also reflects, among other things, the large socio-economic disparities between the different regions in Israel."
This is the second report in a week, which raises serious questions about the cost of living in Israel, compared with other countries worldwide. A comparative cost of living report from the OECD (Organization for Economic Cooperation and Development), released last week, put Israel in first place for the cost of living in 2022 among the countries that make up the organization, overtaking Switzerland and Iceland over the past year. According to the report, which weights the cost of living in accordance with purchasing power in each country, price levels in Israel are 38% higher than the OECD average.
Published by Globes, Israel business news - en.globes.co.il - on August 31, 2023.
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