Housing crisis

As housing crisis deepens, Liberman mulls new plan to drive prices down

Finance Minister Avigdor Liberman is working on a new plan to tackle Israel’s deepening housing crisis, amid new data showing dramatic further increases in house prices.

The plan is an updated version of the one presented in October, which the Finance Ministry realized was no longer sufficient given the deteriorating housing market, according to several Hebrew media reports.

Channel 12 reported that the plan will include three main points: the state will determine the maximum price of the land, depending on the geographical area; contractors who offer the lowest prices will win tenders; and these contractors will have to commit to completing the construction within three years.

Previous plans saw the state award tenders to contractors who offered the highest prices — fattening state coffers while raising prices for homebuyers. The new plan will see the state lose revenue in the hope that the market will adjust to the benefit of the consumer.

Liberman will discuss the plan with senior officials in his office as well as city leaders, Channel 12 said, noting that the proposal will likely still be tailored.

The plan was launched by Liberman after reviewing the latest Central Bureau of Statistics housing figures released on Tuesday.

Screen capture from video of Finance Minister Avigdor Libeman at the opening of a meeting of the ministerial socio-economic committee, February 15, 2022. (YouTube)

According to the CBS, the consumer price index rose 0.7% in February 2022, capping a 3.5% increase from a year ago, or 0.5% above the l objective of the Bank of Israel.

Apartment prices have risen 13% over the past year, with a 2.1% increase in January alone. The total amount of mortgages taken out in February was 11 billion shekels ($3.39 billion), CBS said.

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