Israel’s Property Market Continues to Rise
Amidst rough economic times, Israel’s property market continues to rise. National statistics are kept positive by the continued growth of many cities – Haifa, Tel-Aviv and the surrounding Gush Dan, as well as others, have all experienced a house price increase. In contrast, Jerusalem is one of the few places that saw the cost of housing decrease in 2013. Real estate in Jerusalem is affected by many things such as political conflicts, the global economy, rent prices and mortgage loan interest rates, which kept it from growing.
Key Market Indicators
In 2013, the demand for real estate in Jerusalem rose by 12.2% from the beginning of the year to October. This, combined with falling mortgage interest rates, means the housing market is on the rise. Overall, interest rates have been falling since 2003. To prevent the creation of a housing bubble, Israel bumped interest rates (which dropped to 0.5% back in 2009) back to 1.75% once the economy recovered.
Real estate in Jerusalem is a sellers’ market. Housing prices saw a significant 17.4% rise in Jerusalem in 2010, but low mortgage interest rates make things a little easier for buyers, allowing most to buy their own houses. The mortgage market has not grown much in the last few years, mostly due to the fact that the economy is just starting to rebound from the collapse – this, however, will not always be true.
Economic Growth on the horizon
Notably, rent prices have been going up while the cost of owning a home has gone down. Israel has sustained rapid growth despite turmoil in the political stage both internal and foreign. Even with the on-going Israeli-Palestinian conflict, the Israeli government still advanced plans to build 1,600 houses in East Jerusalem in 2010, plans that have been opposed by the Palestinians and others in the international field.
Overall, the future of real estate in Jerusalem looks good, as well as Herzliya real estate, due to growing economy and a decreasing national deficit.