Israeli home prices up 2.1% in Q3

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Home prices are rising at an annual rate of 8.5%, the Gazit-Globe Institute found, contradicting government figures.

While Israel's Ministry of Finance is trying to find signs of weakness in Israel's real estate market, the Herzliya Interdisciplinary Center Gazit-Globe Real Estate Institute's Index (GGII) has found that the prices rose 2.06% in the third quarter of 2015. The Institute stresses that home prices in Israel are increasing at an annual rate of 8.5%.

"It's back to the trend of rapid price rises," the report said after home prices rose by only 0.9% in the second quarter of 2015, an annual rate of 3.6%. The GGII found that Israeli home prices rose by 6.4% in the first nine months of 2015.

The Government Assessor found that home prices rose by only 1.4% in the third quarter while the Ministry of Construction and Housing claimed that prices fell 4% in the third quarter from the second quarter. While the Government Assessor only analyzes data on four room apartments in 16 selected cities and the Ministry of Construction and Housing calculates a simplistic national average, the GGII is considered a smarter index, although not entirely without problems.

The price rises continue even though the number of deals was down 33% in the third quarter from the preceding quarter and the weight of homes bought for investment fell 16%.

Gazit-Globe Real Estate Institute CEO Dr. Efrat Tolkowsky said, "a country that neglects transport infrastructures in general and public transport in particular can't expect that offering a higher supply of housing in the periphery will influence price levels in demand areas."

Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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