Housing prices in Israel have increased by 7.2% in one year, according to a report published Thursday by the Central Bureau of Statistics.

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A comparion of the transaction prices between April and May this year and the same period of time in 2020, showed that prices went up in all of Israel's districts. Housing prices in the northern district increased by 8.8%, the central district by 7.3%, the Tel Aviv district by 6.9%, the Jerusalem district by 6.8%, the Haifa district by 6.1% and the southern district by 6%.

In addition, the bureau registered several significant cost increases in June 2021. The Consumer Price Index went up by 0.1% compared to May 2021, the food index by 0.8% and the fresh vegetables index by 1.4%. On the other hand, a significant decrease was reported with fresh fruit (8.2%), and clothing and footwear (3%).

Altogether, since the start of 2021, the CPI has increased by 1.6%.

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The Jerusalem Municipality will increase its secular and national religious population, Mayor Moshe Lion said Sunday.

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Speaking at an urban renewal conference of the Israel Construction Center attended by local authority heads, entrepreneurs, and leading professionals in the real estate field, Lion asserted that "Jerusalem is the State of Israel's capital of opportunity. Now is the time to invest and believe in the city, through relatively small investments, a lot of money can be made here."

He said that "ultimately, my goal is to get to a strong Jerusalem. I want to grow, and for that, it [the city] needs more and more residents. I want to get to 10,000 housing units a year. We're talking about a huge city. A lot of urban renewal, construction on empty lots, and a lot of employment."

Some 950,000 people reside in Jerusalem, more than twice the population of Tel Aviv. Just one-third of Jerusalem's population belongs to the secular or national-religious sector.

"We want to grow the city, and the number of secular and national religious residents in particular because that is the most productive sector," Lion explained.

"To that end, we are making every effort to cut bureaucracy to zero. Last year, we noticed there weren't enough construction permits. Up until now, the average stood at 2,000 new construction [projects] a year, and this year, we will cross the 4,000 threshold," he said.

According to Lion, buildings 30-stories high will be built along the route of the Jerusalem light rail.

"Jerusalem is going to grow, and for that, it needs more and more residents," he concluded.

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The proposal is the brainchild of Deputy Public Security Minister Gadi Yevarkan, himself a member of the Ethiopian-Israeli community, who recently met with Construction and Housing Minister Yakov Litzman. The two agreed on a series of actions to be taken to improve the lot of Ethiopian Israelis.

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Yevarkan presented an overview of the community's housing needs, and also suggested ideas to promote employment initiatives in the community.

The two sides agreed that Yevarkan would compile housing plans that would be submitted to the Construction and Housing Ministry for evaluation by its professional staff. It appears that such a plan might be given a green light and approved for central Israel.

Yevarkan told Israel Hayom, "I'm excited, this is great news. The significance of establishing a town for the Beta [Israel] community is the fulfillment of the dream of our forefathers, going back generations, to build a home in the ancestral land they dreamed of.

"A dedicated town for Ethiopian immigrants in Israel will be founded 40 years too late, but it's good that it will be founded. This is a small step for the state, but a giant step for the community. I am enormously privileged to be part of this pioneering project," he said.

Yevarkan expressed his thanks to Litzman for cooperating with his vision.

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The Swiss bank's "Global Real Estate Bubble Index 2019" measures housing prices in 24 large cities worldwide. This year's index included, for the first time, Madrid, Moscow, and Tel Aviv, listed as cities with high housing prices, as well as Dubai, where prices are listed as "balanced."

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According to UBS, among the cities covered by the index, Tel Aviv has seen the largest housing price increases in the past 30 years.

The report found that home prices in Tel Aviv rose almost consistently from 2003-2017, which caused the market to enter a "bubble price range."

However, the report said, the growing difficulty of purchasing an apartment and the rise in mortgage prices led to an actual price drop of almost 10%.

"The party is over," the UBS report declared, explaining that housing prices in Tel Aviv were "approaching normal."

Middle-and-upper-class Israelis need to work for 11 years to be able to afford a 60-square-meter (650 square-foot) apartment in central Tel Aviv, similar to the years required to buy a home in Tokyo or New York, but less than Hong Kong and more than are needed to buy a home in Munich, Moscow, Frankfurt, or plenty of other major cities.

Tel Aviv is ranked 13^th on the list of the world's "bubble cities" – cities in which housing prices are outrageous and have the most chance of seeing their real estate bubbles burst.

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Now they are barely hanging on, even after drastically cutting spending.

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Like most Iranians, the family was hit hard by the collapse of the national currency, accelerating inflation and eroding wages – fallout from unprecedented US sanctions.

Perhaps most devastating for Iran's large middle class has been the sharp spike in housing prices, more than double in a year. That has uprooted tenants and made home ownership unattainable for most.

The Alidadis sold their car and borrowed from friends and family to buy a smaller apartment in a less desirable area on the outskirts of Tehran – in hindsight a smart move, since they've been priced out of their old neighborhood by now.

"Right now, this is the most difficult period ever," said Alidadi's 58-year-old mother, Shahla Allahverdi, reflecting on the Islamic Republic's 40-year history as she shared a park bench with her daughter.

Iranians worry about the future as tensions between Iran and the West continue to rise.

The escalation – triggered by the Trump administration's withdrawal last year from Iran's 2015 nuclear deal with world powers – seems unstoppable, and European mediators trying to defuse the situation keep coming up short.

The showdown between Washington and Tehran has upended the lives of Iranians as they try to survive on less. A bride borrowed a wedding dress because she couldn't afford to buy or even rent one. More newlyweds move in with their families to save money. Visa requests are up at foreign embassies, with young Iranians eager to leave.

Some wonder how far Washington is willing to push its "maximum pressure" campaign.

The Trump administration says the sanctions are aimed at getting Iran to renegotiate the nuclear deal, which offered sanctions relief in exchange for curbs on Iran's nuclear program.

Washington denies its ultimate aim is to end the rule of Shiite Muslim clerics – though John Bolton, an architect of the pressure campaign, called for regime change before he became Trump's national security adviser.

Some say Washington's actions appear to have strengthened the paramilitary Revolutionary Guard and other hard-liners at the expense of Iranian President Hassan Rouhani, once the nuclear deal's most prominent champion.

The Guard has been able to deepen its role in the economy, domestic politics and foreign policy under the guise of security, said Ellie Geranmayeh, a senior fellow at the European Council on Foreign Relations.

Despite the economic upheaval, there have only been sporadic protests.

Iran analyst Adnan Tabatabai said he believes Iranians are "reluctant to take their grievances to the street" for now, amid fear of further chaos and pushback by the authorities.

The economy contracted by 4.9% from March 2018 to March 2019. It is expected to shrink by an additional 5.5% in the year ending March 2020, according to Iranian figures. The official inflation rate has risen to 35%, up from 23.8% in the March 2018 to March 2019 period.

The housing and construction sector, which makes up about one-quarter of the economy and is the top destination for savings and investments, has been thrown out of balance.

Property owners are reluctant to sell and landlords are sharply raising rents because of the currency collapse, said Ali Dadpay, a finance professor at the University of Dallas. He said an estimated 490,000 homes stand empty in and around the capital, including more than 40,000 units added this year.

At the same time, construction lags far behind the need of 1.2 million new homes a year nationwide, said Hesam Oghabaei, deputy head of the Tehran association of real estate agents. He said about 25% of Tehran's residents live in rented apartments, and the vast majority cannot afford the price increases.

The Peyman family – elderly parents and eight adult children – own a 110-square-meter (1,180 square foot) apartment in Tehran's District 12, a poor area plagued by drug addiction and other social problems. More than a decade ago, the Peymans rented the apartment, and used the extra income to move to a nicer area.

Now they are back in District 12, renovating the old apartment after being squeezed out of the good neighborhood by a rent hike.

"We have to come here because we have no other choice," said the patriarch, Moslem, 65. Four unmarried children will live with him and his wife. Across-the-board price increases put marriage out of reach.

One of Tehran's newest areas, District 22, is under construction on the northwestern edge of the city. It consists of apartment high-rises and shopping malls arranged around an artificial lake called Chitgar.

Maryam Alidadi and her husband bought an 82-square-meter (880 square foot) apartment here in December, downsizing by a third from their rented home in a more affluent area.

"Our standard of living has dropped considerably," she said, adding that she now regrets having quit her government job four years ago when her son Rami was born.

The US sanctions have proven particularly devastating for Iran's large middle class, said Dadpay, the finance professor. "This is the economic class that depends on the global economy, depends on their skillsets, and most of them are earning fixed incomes," he said.

The economic freefall could shape Iran's domestic politics, with parliament elections in February posing the first test. Middle class voters have traditionally favored reformist candidates but might sit out voting because of a lack of alternatives, inadvertently boosting hard-liners.

Pro-reform politicians who favor a greater opening to the West are closely linked to the nuclear deal.

With the deal faltering, the hard-liners, including the Revolutionary Guard, are becoming more entrenched, said Geranmayeh, the analyst.

The Guard, she said, "is going to be a force to be reckoned with for many years to come."

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Ariel Kendall, director general of the Qualita organization, the umbrella organization for French immigrants in Israel, told Israel Hayom on Tuesday that "the continued drop in the number of French immigrants to Israel is very painful.

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"The situation in France, a country that currently suffers from numerous anti-Semitic incidents and increasing instances of violence against Jews, provides an opportunity to prompt many Jews from France to make aliyah, and Israel is missing that opportunity because it isn't prepared to take in immigrants from France and hasn't laid out any strategic plan that will allow it to absorb and settle tens of thousands of immigrants in an appropriate, effective manner," Kendall said.

Kendall warned that if Israel does not create absorption solutions that address employment, education, and housing for French Jews, as it does for immigrants from other countries, the Jews of France will remain in danger or prefer to leave France for a third country.

"They won't come to Israel, and that's a shame," he said.

Qualita recently conducted a survey among some 800 new immigrants from France. The results showed that the new immigrants faced a number of difficulties upon arriving in Israel, the main one being finding work. According to the study, 40% of French immigrants are unemployed.

The problem of unemployment affects not only the new immigrants themselves, but also deters other French Jews from making the move, fearing that they, too, will be unable to find work. According to Qualita, the French immigrant population includes hundreds of registered nurses who are unable to work in Israel because the country does not recognize their qualifications, even though the Israeli health care system lacks trained nurses.

Other professionals who qualified in France, including psychologists and engineers, arrive in Israel to find that their training, too, is not recognized by the Israeli regulatory bodies and they are therefore unable to work in their professions.

Some French immigrants take any available work to support themselves, such as telemarketing. Others choose to keep their jobs in France to support their lives in Israel, meaning constant travel back and forth, which has been termed "Boeing aliyah." Still others despair and wind up returning to France.

The Qualita survey showed that 10% of French immigrants return to France within three years of making aliyah.

In addition, the survey indicated that the government's Immigration and Absorption Ministry does very little to help French arrivals. Only one-quarter of respondents said that the ministry was doing well in helping French immigrants integrate, and only 27% said they took advantage of services offered by the ministry beyond the initial benefits extended to all immigrants and an introductory Hebrew course.

The survey also appears to bust the myth that French immigrants are "snatching up" property. Some 60% of respondents said they did not own the homes in which they lived, and half the French immigrants who rent homes pay 4,000-6,000 shekels ($1,100-$1,700) a month in rent.

The French immigrants are urging the relevant authorities to put together a plan to help Jews from France and as Israel heads into the second election of 2019 are calling on politicians to right the wrong and create a special plan tailored to the needs of French Jewish immigrants.

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Srugo told the conference that the government must "stop pulling the wool over the public's eyes."

"There is a shortage of apartments here, much greater than the 146,000 households that have registered for the Mehir Lemishtaken ["Move-in Price" subsidized housing program for first-time buyers] lotteries. For years, we have been building fewer than 50,000 new housing units per year. To solve the crisis in the short term, we need to add another 20,000 housing starts a year in sought-after areas and get to 70,000 housing unit starts per year," Srugo said.

Professor David Passig, a future studies researcher, also addressed the conference. Passig discussed global trends in housing and explained that the housing market in Israel was going in the opposite direction from the rest of the world: while global population growth has been checked, Israel is seeing impressive population growth. Pasig presented a model showing that by 2050, Israel's population would number at least 16 million.

"Not preparing for that scenario is a crime. Our children will blame us if we aren't ready for the future because we know that this is what is going to happen. It's not something we can say we didn't know about," Passig said.

Srugo called on the government to establish a strategic planning authority while keeping its housing task force active.

"We are on the brink of a socio-economic abyss. As long as the government doesn't begin strategic planning for the next generation in Israel, we'll find ourselves in the biggest crisis since the state was founded. In 2030, there will be 12 million residents in Israel, and in 2050 there will be 17 million people here. Remember, this is a country where it takes 15 years to approve construction of a single [new] neighborhood, so 2030 is tomorrow and 2050 is the day after tomorrow. By then, Israel will need two more major metropolitan areas. Not two cities; two new major built-up zones."

Srugo warned that residential construction could not grow at the rate of demand without a dramatic increase in investment in infrastructure. He demanded that to allow infrastructure work to take a leap forward, the government address immediately the growing shortage of stone and other construction aggregate, thereby lowering the cost of raw materials for construction. He also demanded that the government keep Chinese construction companies out of Israel, as most western nations have.

"We don't need to bring in the Chinese and if we continue to do so, it will have serious ramifications for the [construction] sector, as well as our economy and security. Israel needs laborers, not foreign companies," he warned.

"The government must encourage the population to move to the periphery by investing in education, culture, and jobs, as well as building the necessary infrastructure," he said.

"Immediately expanding construction activity, which we need to do now, is the right thing for society and, no less important, for the economy. In the next few years, Israel will need to handle a deficit. Expanding construction and infrastructure as needed will contribute to economic growth, adding 4.1% per year to the gross domestic product, an additional 18 million shekels [$5 million] per year to the state coffers from the sale of land and taxes, and 70,000 jobs for Israelis," he said.

According to Israel Builders Association CEO Amnon Merhav, all the data presented at the Eilat conference "points to the need for a major change in how the government is handling the housing crisis."

"Only 18,000 apartments have been sold through the Mehir Lemishtaken program thus far, and even though the government hasn't made that public, we can assess that the number of apartments that have actually been handed over to the buyers is even smaller, a few thousand. So government intervention has resulted in an increase in the gap between supply and demand for apartments. At the same time, construction inputs, which jumped by 3% in 2018, and the shortage of raw materials, have become a major threat to our ability to address housing prices," Merhav told the conference.

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According to CBS data, Tel Aviv, the "city that never sleeps," is also the city of nonstop emigration. In 2017, a total of 23,040 Tel Aviv residents left. Jerusalem saw the second-largest exodus, with 17,098 residents leaving. A total of 9,870 Haifa residents left the city that same year.

Ramat Gan, east of Tel Aviv, took in the largest number of new residents in 2017, welcoming 9,180 new residents, 2,593 of whom are former Tel Avivians. In comparison, 1,632 Ramat Gan residents made the opposite trek across the Ayalon Highway, into Tel Aviv.

Rosh Haayin took in the second-largest number of new residents (5,223), followed by Ashkelon (4,270) and Hadera (3,341).

Other figures point to the fact that one-quarter of Israeli citizens either do not pay property taxes or find it difficult to meet their property tax burden. Among business owners, 44% either do not pay property tax or have difficulty doing so.

The failure to collect full property taxes is one of the reasons why the number of cities and local authorities running a budget deficit jumped from 53 in 2015 to 83 in 2017. One-third of the nation's 255 local authorities appeal to the government for help meeting their expenditures, receiving some 3 billion shekels ($800 million) in municipal grants each year.

According to the CBS data, in 2016 177,500 Israelis were living in institutions that provided housing, mostly boarding schools and religious institutions, as well as old-age homes. In only 68.1% of big-city households do the residents own the apartments in which they live, the lowest rate of homeownership since the 1970s.

The lowest rate of homeownership was in Tel Aviv-Jaffa, where only 43.8% of apartments are owned by their residents. The Bedouin town Rahat listed the highest rate of homeownership, 94.5%

More than half – 53.4% - of Israelis worked outside the communities in which they lived. Givatayim, located east of Tel Aviv, had the highest rate of commuting residents at 78.7%. Only 9.3% of the residents of Eilat, at the southernmost tip of Israel, worked outside the city.

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The ministry plans to allow young couples to borrow up to 90% of the value of homes valued at up to 1.3 million shekels ($363,000).

The Bank of Israel set a cap of 75% earlier this decade to slow price rises, but property values have continued to rise.

The ministry did not provide any further details on its plan to raise the cap to 90%. According to Israeli media reports, the government would have to provide funding or guarantees for loans above 75%.

Near-zero interest rates have made housing a top investment in Israel. Israel's home prices have more than doubled in the past decade to an average of about NIS 1.5 million ($420,000).

Apartments in Tel Aviv cost more than NIS 2 million ($560,000) on average and in Jerusalem cost NIS 1.9 million ($530,000).

A Bank of Israel spokesman said the government had not approached the bank with a plan to raise the mortgage cap and declined to comment further.

Finance Minister Moshe Kahlon, who campaigned in the 2015 election on reducing house prices, has sought to make it simpler to obtain permits to build new homes, offered developers discounts on buying land and provided subsidies for some new building projects.

In March, the central bank said the subsidies had created a two-tier system, with some benefitting from assistance and others struggling to afford homes at free market prices.

Housing starts in Israel fell to 49,660 in 2017 from 55,622 the previous year. In the second quarter of 2018, there were 11,228 starts, compared with 12,798 a year earlier.

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