A year after the new government was formed, and after repeated promises that the high cost of living and the housing shortage were priorities, it is still very premature to talk about any results.
A poll by the Smith Institute in February for the "Globes" Real Estate Conference offers few reasons for optimism. Most Israelis believe that home prices will continue to rise in 2014 and that investing in real estate is the best investment option. The survey was conducted among a representative sample of 500 people. The margin of error is 4.5%. 65% of the respondents are homeowners, of which 58% live in the home they own and 7% rent their homes and live as tenants elsewhere; 24% rent; and 11% either live with relatives or have other arrangements.
In response to the question, "What will happen to home prices in 2014?", 63% of respondents said that prices will rise, of whom 42% said that price will rise by up to 5% and 21% said that they will rise by more than 5%. (Prices have already risen by 80% since 2008). 24% of respondents said that prices will remain unchanged, and 13% said that prices will fall, of whom 7% said that prices will fall by less than 5% and 6% said that prices will fall by more than 5%.
It seems that more Israelis are throwing up their hands. In the 2013 survey, 60% of respondents said that home price would rise that year, and in 2012, 30% said that they would go up.
The Smith Institute said that 22% of respondents younger than 29 believe that home prices will fall, compared with 10% of respondents over 50.
In response to the question, "What is the main reason for the rise in home prices?" 37% of respondents said that the government does not want prices to fall, and 22% said that the government is unable to do anything to lower prices. 11% of respondents said that mayors oppose lower prices, 5% cited the low interest rate, 9% gave another reason, and 16% said that they did not know.
In response to the question, "What is the main factor that can bring about change?" 32% of respondents said the Prime Minister Benjamin Netanyahu; 15% said Minister of Finance Yair Lapid; 13% said the Israel Land Authority, 5% said Minister of Housing and Construction Uri Ariel, 4% said Minister of the Interior Gideon Sa'ar, 5% mentioned something else, and 26% said nothing or that they did not know.
In response to the question, "Where is the best place to buy an apartment?" 25% of respondents said Tel Aviv, 16% said Jerusalem, 10% said Haifa, 8% said Yavne, 7% said Netanya and Beersheva, 5% said Rosh Ha'Ayin, 4% said Kiryat Gat, 11% mentioned a different location, and 7% said that they did not know.
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2014
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