Israeli housing costs up

A recent survey of housing prices in Israel over the past fifty years presents a picture of thriving real estate prices, regardless of wars, rockets or terrorism.

In response to internet bloggers and commentators cries that prices on housing in Israel won’t go down until rockets fall on the land (G-d forbid), Israel’s online business news site, Globes, studied statistics from Israel’s turbulent history to determine the truth of this statement.

Overall, in a survey in percent of changes in housing prices and changes in inflation from year to year from 1962, there were times when the rise in inflation exceeded the rise in housing costs but, prices rose in real estate in Israel except in 1966 and five years between 2000 and 2007. Thus housing prices in Israel rose, often in double digits, during 44 years.

After the Six Day War, prices increased, according to the article in Globes, from euphoria and economic growth, in spite of the War of Attrition (between June 1967 and August 1970). After the Yom Kippur War in 1973, the economy was in crisis due to energy issues and a high rate of inflation. Even so, prices rose in real estate and all prices went up with the rise of inflation at the time, including the cost of housing. Globes discounted the years of the war when inflation was in triple digits, but after the war, after the economic stabilization program and instituting the new shekel, prices in real estate again rose. Prices rose even during the first intifada. Prices continued to climb for real estate in the 1990s during the Gulf War even when the scud missiles fell on Israel. During that time, there was an influx of immigrants from the Soviet Union and an increase in building, with over 140,000 apartments constructed during that time. Inflation hit zero in 1999.

In the first decade of the 2000s, with the second intifada, housing prices began to go down, but with the greatest drop no more than 6%, compared to the double digit rises of other times. They noted that with a rise of 46% over the last four years, it seems as if there would not be a sharper drop than 6% in housing prices in Israel.