2023-12-29 13:37:00
Demand for Apartments in Israel Could Lead to Rising Prices
The housing market in Israel is experiencing steady demand for apartments, with reports estimating that 55-60 thousand apartments are sought after each year. However, the supply-side of the market reveals a different story. According to figures from the Central Bureau of Statistics, construction starts have decreased to 54,000 apartments in the last year, while the construction time has extended to 33 months.
The declining construction rate and increase in construction time allude to potential inventory shortages, especially in high-demand areas such as central city locations. The lack of finished inventory, even in the short term, could lead to price hikes in these areas.
When analyzing the apartment market, it is crucial to consider regional variations, as apartment prices may not increase uniformly. In-demand areas, such as the promenade in Tel Aviv, are experiencing significant price growth due to limited supply. Although this may appear unrealistic to an outside observer, the power of demand and supply is evident in the willingness of some individuals to pay exorbitant prices for specific locations.
Overall, the data suggests that while there may be sufficient inventory in progress, there is a probable shortage of finished apartments. The resolution for regions with apparent supply problems will depend on matching supply and demand according to specific areas, as price increases continue to drive demand in certain localities.
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