The Covid-19 crisis has pushed up housing prices in Israel but rents are frozen. According to the Central Bureau of Statistics, the average price of a four-room home in Israel in the first quarter of 2021 rose to a record NIS 1.65 million, with prices rising 5.3% since June 2020. In contrast, the average rent in the first quarter of 2021 was NIS 4,087, up only 1.5% from the corresponding period last year, Trend reports with reference to Globes.
Figures from the Chief Economist at the Ministry of Finance also indicate that Israel's residential real estate market has heated up over the past year. Since the end of the first lockdown in May 2020, tens of thousands of apartments are being bought and sold each month - 10% higher than the multi-year average.
More evidence of the flourishing property market comes from the Bank of Israel, which found that mortgage taking again exceeded the NIS 8 billion mark in April. This would have been an inconceivable monthly amount one year ago, and yet NIS 8 billion has been surpassed three times since December 2020. If the current rate continues then 2021 will be a record year for mortgage taking.
The bottom line is that housing prices are rising and the pace is picking up - 4.5% over the past 12 months, according to the Central Bureau of Statistics and 5.3% over the past 10 months, which is an annual rate of 6.3%. In the fourth quarter of 2020 and the first quarter of 2021, housing prices rose 7.3% on an annualized basis.
Of course this rise in prices has been uneven around the country. Over the past 12 months the price of an average four-room apartment rose by 16.4% in Netanya, 10.2% in Tel Aviv, 8.8% in Rishon Lezion, 6.7% in Ramat Gan, 3% in Petah Tikva, 2.4% in Beersheva and 2% in Haifa, but fell by 1.6% in Jerusalem.