House price growth of Israel can not be stopped?

26.01.2011 14:06
Financial authorities are concerned about Israel's growing bubble in the housing market - the 2010 prices have risen by almost half. This forces the Bank of Israel once again raise interest rates.

Prices for the residential market, Israel continues to rise despite tighter monetary policy. But the experts' forecasts about the collapse of the market so far failed to materialize.

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As reported by Global Property Guide, the last two years real estate in Israel, the average has risen in price by 37% - to 1,05 million shekels ($ 294,660). More housing became more expensive in Tel Aviv (46%) and in Jerusalem (30%).

Higher prices experts explain the rapid economic growth, low interest rates on loans and long period of peace. In addition, there are speculative: the free exchange rate policy of Israel is pushing investors to invest in real estate for resale.

The country's authorities have undertaken several measures to cool the ardor of buyers and thus lower prices. However, according to Central Statistical Bureau of Israel, in the third quarter of 2010, the average cost of second homes increased by 16.4% compared with the corresponding figures for 2009 and almost 10% - compared with the second quarter of 2010.

The biggest rise in prices on the real estate market of Israel before this was recorded in late 2009. Then the cost of housing has increased by 22%.

Earlier this year, Global Property Guide predicted that the growth of the real estate market thanks to the Bank of Israel will raise interest rates in the next two months. However, this has happened before: 24 January 2011 Head of the Central Bank of Israel, Stanley Fischer, said the increase in the discount rate to 0.25% (up 2.25%).
Content tags: Overseas property
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