Housing and Construction Minister Yakov Litzman has officially warned Prime Minister Benjamin Netanyahu that housing prices are expected to rise.
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"In the past month, the gap between supply and demand has become evident in the outcomes of the land tenders published by the Israel Land Authority and the Housing and Construction Ministry. They indicate a significant future rise in housing prices, unless immediate steps are taken to remove obstructions to infrastructure development, which will increase apartment supply," he said.
The minister has asked the government to allocate NIS 2.5 billion for an economic plan in the housing and infrastructure sectors. Litzman noted that he petitioned Netanyahu after repeated appeals to the Minister of Finance and the Finance Ministry. He requested that the housing sector be formally included in the government's emergency economic package for dealing with the COVID-19 crisis, warning that if no steps are taken, the housing market may rapidly deteriorate, causing a shortage in apartments and a possible rise in housing prices.
"As the minister responsible for housing and construction in Israel, I am concerned about the direction the housing market is taking," Litzman said.
"Data has been brought to my attention over a long period of time regarding a decline in the apartment supply and a concurrent and ongoing rise in demand. The latest findings published by the Central Bureau of Statistics also indicate a rise in housing prices."
Litzman expressed his concern that a future shortage of apartments and rise in house prices will further increase the economic burden on Israeli households. "Time is short, and an effort by the government to change these trends is urgently needed. If we don't act swiftly and these trends continue, they may require a greater budgetary investment on the government's part and may negatively impact the entire economy," he noted.
According to Litzman, investments are needed in infrastructure projects in transportation, wastewater drainage and purification, school and kindergarten classes, and more subsidies for the purchase of apartments in the periphery (grants for second-hand apartments).
"In my previous petitions I wrote of the urgent need for governmental support of the construction sector, particularly in light of the growing gap between the number of new construction projects and the increasing number of households," Litzman said, adding this will accelerate the trend already seen in the housing market, with a rise of 3.2% in apartment prices over the past year.
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"I therefore ask that our budgetary needs be included in the economic package so that we can act optimally and efficiently to publish construction tenders throughout the country, including 'Reduced Price' tenders. Our aim is to increase supply as broadly as possible to fulfill the needs of the economy. This should be done immediately before it is too late," he concluded.
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