Housing prices still rising in some Israeli regions

Housing in Harish credit: Shutterstock

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Prices are still rising in the northern and central regions but falling more steeply than the national average of 0.2% between December-January 2022-2023 and January-February 2023 in the rest of the country.

In January-February 2023 housing prices in Israel fell 0.2% in comparison with December-January 2022-2023, the Central Bureau of Statistics reported last week. Although housing prices have risen 12.7% over the past year, the latest data suggests a change in trend as higher interest rates and more expensive mortgages dampen the housing market.

But a closer look at the data shows that prices are still rising in some regions of the country. In the northern region (the north excluding the Haifa region) in January-February 2023 housing prices rose 2.2% in comparison with December-January 2022-2023. There has been little new construction in the region so that demand outstrips supply, although this is currently the cheapest region in the country with the average home costing NIS 1.3 million.

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Prices also rose by 0.2% in the central region, which does not include the Tel Aviv region. In Tel Aviv itself (Tel Aviv, Ramat Gan, Givatayim and Ramat Hasharon), the price of an average home fell 0.5% in January-February 2023 in comparison with December-January 2022-2023. The Tel Aviv region is the country's most expensive with an average home costing NIS 3.1 million and in the current economic climate such high prices are perhaps not sustainable. Prices also fell 0.5% in the Haifa region, which includes the Kraiot, Hadera and Pardes Hanna-Karkur. It is less clear why prices fell so much in this region where homes are more modestly priced.

Prices in January-February 2023 fell 1.1% in comparison with December-January 2022-2023 in the Jerusalem region, which includes Beit Shemesh and Mevaseret Zion. The average home in the region costs NIS 2.1 million and it is possible that the approval of 8,000 new homes over the past four years in Beit Shemesh has made developers flexible in the asking price for new apartments.

Prices in January-February 2023 fell 1.5% in comparison with December-January 2022-2023 in the southern region, which includes Beersheva, Ashkelon, Ashdod, Kiryat Gat, and Kiryat Malakhi. Prices in this region have fallen 3.3% over the past four months.

Published by Globes, Israel business news - en.globes.co.il - on April 18, 2023.