In a recent announcement, the government plans to build at least 280,000 new homes by 2025. This is in response to the dire housing crisis, unaffordable quality of life, and lack of acceptable living standards that the Israel real estate industry has been serving and struggling with over the last year.
The planning and development goals, put together by the Finance, Housing and Construction, and Interior Ministries, include a budget of $2.5 billion dollars for transport and infrastructure, $1.75 billion on new schools, and $630 million on Arab community development. The government also aims to remove the common bureaucracies to build, increasing the investor tax by 8% and decreasing costs to build on private land. While the government is focusing on building, the housing crisis remains an issue for the average citizen.
With no protection for tenants and large demand, both homeowners and real estate agents are driving up housing costs and demands. Some landlords have increased monthly prices by more than 40% or up to 3000 NIS. Israel’s average salary between 7000 – 10,000 shekels and the rising costs of urban living has driven what was a thriving community out of the city.
The real estate spiral continues, and it will take more than building homes to cure the growing problems. Regulating the real estate industry should be a priority.