Real Estate in Israel – A Retrospective
The supplement contains articles dealing with Israeli real estate news, trends, statistics and legislation. The last edition for 2012 was a celebration of 20 years and 1,000 issues of the Globes real estate supplement, and included a retrospective of Israeli real estate events during this time.
Some of the statistics in the supplement highlighted the growth of the Israeli economy over the past twenty years. Below are a few particularly interesting statistics.
In 1993 the budget of the Ministry of Housing was 5.14% of the total government budget. In 2012 it was a mere 0.72% of the total government budget. However, the government earned 88.5 million shekels in taxes stemming from real estate transactions during these twenty years. In 2012 alone the government earned 7.3 million NIS from taxes stemming from real estate transactions. This is 3 times the amount earned in 1993.
In 1993 there were 1.3 million households in Israel. In 2012 there were 2.2 million. This shows an increase in population and the need for more housing.
In 1993 the average number of people to a room was 1.2. In 2012 there was an average of 0.8 people to a room. This means that Israelis are buying bigger apartments.
In 1993 there were approximately 40 commercial centers of which 16 were shopping malls. Now there are 320 commercial centers of which 83 are shopping malls. 24% of the construction projects begun in 2005 were for buildings of eight floors and higher. In 2012 this percentage had risen to 40%.
What do we learn from all this? In the past 20 years the Israeli population and economy have both grown. There has been an increase in sales of residential apartments, apartment prices have gone up and more large apartments are being sold. This is reflected in the increase of taxes collected by the government. This is also reflected in the increase of commercial centers constructed all over the country.
We also have seen an increase in tall buildings which allow for more apartments on a smaller footprint of land. The country is undergoing a major urbanization process.
However, we also note a major decrease in government investment in housing. Is it any wonder? With these statistics does the government really have an interest in bringing down the price of apartments?
Where do you think real estate in Israel is headed? Comments welcome.