Israel holds record in rising home prices
Goldman Sachs study reveals apartment prices in Israel have soared some 40% since 2009, highest rate among OECD countries. But there is some good news, as prices are expected to drop
A new study conducted by the Goldman Sachs investment house reveals Israel
holds the global record in rising apartment prices among OECD countries.
Price hikes were also recorded in Germany, Canada and Australia.
Apartment prices in Israel have soared some 40% since 2009, compared to a 29% increase in Norway and a 22% rise in Switzerland, the two countries ranked after the Jewish state.
Real Estate Bubble
Yaron Druckman
Central Bureau of Statistics figures show sharpest rise in housing prices occurred in 2009. Number of Israelis living in apartment they own remains stables over past four decades
On the other hand, in the same four-year period, apartment prices in Ireland plummeted by some 40% and by more than 30% in Greece and Spain. In the United States, Japan, Holland and Italy apartment prices also fell during the examined period. In France, Korea, Belgium and Britain there has been hardly any change in home prices.
The researchers also expected home prices in Israel to continue to rise, in the short run, in the coming year. A five-year forecast, however, sees a high probability for a significant drop in apartment prices in the country.
Dramatic reductions in the long run are expected in countries which have reached a historic peak in housing prices, led by Israel, but also in Germany and Switzerland. According to the forecast, the drop in prices may reach up to 30%.
Encouraging figures come from the countries which have experienced the greatest crisis – the US, Britain, Spain and Ireland. Recent encouraging employment figures, along with a downward trend, may point to a rise in home prices in the future.
Another troubling figure from the study relates to the ratio between apartment prices and rent in Israel, which is among the highest in OECD countries. The ratio is received by dividing the average apartment price in the average annual rent.
Opposition Chairwoman Shelly Yachimovich said in response to the figures, "The dubious honor of winning the first place in the rise in housing prices in recent years joins our leadership of the poverty and inequality rankings under the OECD index. This is a serious social problem which holds far-reaching implications for the life and economic situation of many Israelis."
