Housing crisis in Israel: country experiencing large price increases

In tel aviv the price of apartments doubled in five years, and in Haifa the price of homes increased 70% to 80%. Israeli citizens are having more and more of a difficult time purchasing a home, regardless of where in the country they live.

In tel aviv three different areas were examined: Neve Barbur in the south, Arlozorov in the center, and Seminar Hakibbutzim in the North. Each of these places experienced a large price increase in recent years. The area that showed the highest price increase was Arlozorov Street, where the cost of an apartment has risen 106%.

In Petah Tikva, the Neve Gan area has experienced a building boom in recent years and prices have also shown relatively sharp increases in price. Current data shows that a new four bedroom apartment in the area would cost around 1.7 million shekels, when a similar apartment in 2008 cost 1 to 1.1 million shekels.

In the Tel Aviv suburb of Holon some buildings have more than doubled in price over the last few years. In the beginning of 2008 a four-room apartment in the city cost around 731,000 shekels, but in early 2015 similar apartments cost as much as 1.47 million shekels. In most places in the city the cost of real estate rose at a higher rate than inflation.

In Bat Yam one building was found to have increased in price by a hefty 222%. In january 2008, a two-room apartment went for 382,000 shekels. Just over half a decade later, a similar home in the same building costs 1.055 million shekels. Considering the apartment that was sold last year was 13 square meters bigger than the apartment sold in 2008, the weighted price increase can be put at 115%.

In Rishon Lezion the price of a five-room apartment has risen by more than 50%. In Ashdod the prices in one building had shot up by close to 65% in six years. According to data from real estate analyst Madlan, in the southern city of Beersheva, apartments on Oskar Schindler Street have increased 62% during the same period.

In the Sharon region, house prices have also risen in recent years too, although not to the same extent as other places.

According to Madlan, a five-room apartment in the Ramat Poleg neighborhood of Netanya increased by over 50% in two years.

Further east in Kyriat Hasharon, prices for four-room apartments have risen by 27% in the last five years.

The phenomenon continues in Ra’anana too. The cost of an apartment on the central Borochov Street has increased by close to 25% in the past five and a half years. In Ramat Hasharon, the price of a five-room apartment has risen by 22.3% in three and a half years, and two months ago an apartment in the area went for NIS 4.16 million.

The situation is quite similar in northern Israel. In Haifa for example, we examined two apartments, whose prices have increased by almost 70% in a little over five years. In the old Nesher neighborhood, housing prices have risen by almost 80%. But it was the only place in which a 4.5-room apartment cost under a million shekels.

In the Kiryat Motzkin neighborhood in Haifa, there was a price increase of about 54% in five and a half years. Nonetheless, the price of a home sold in December 2014 was the same as the price of a similar home sold two years ago. However data from Madlan and the Tax Authority does not show whether the apartment sold in 2012 is classed as a luxury apartment, which would have inflated its price at the time.

There was a 34% increase in house prices, on one Afula street. In Nahariya, however, there was a massive price increase of more than 86% on one street.

Ironically, it was in the capital city that we found a relatively modest increase in both buildings we examined on Ben Zvi Street. In four years, prices in Jerusalem rose by just 12%.