Israel’s real estate market currently ranks at number one worldwide after adjustments, but Bank of Israel Governor Stanley Fischer is taking measures to ensure the bubble does not burst.
According to an article published in the Global Property Guide, a trade magazine that monitors the world housing market, Israel’s housing prices rose sixth-fastest among 36 countries in the second quarter of 2010.
After adjustments in the top five countries for economic crashes and rebounds, and reviewing the data for the past two years, concluded the magazine, Israeli real estate ranked number one.
However, “The housing market has set off enough crises, and we’re not going to let that happen in Israel,” Fischer told reporters at a briefing earlier this month. Israel’s economy was one of the few that held firm during one of the worst fiscal crashes to hit the global economy over the past several decades.
Dubai was one of the first markets to begin the slide in early 2008, where less than 10 years ago its glittering panoply of luxurious development projects dotted the landscape. By 2009, prices had crashed by 50 percent or more.
In the United States, defaults on mortgages and massive foreclosures forced families out into the streets; unemployment skyrocketed, and new construction screeched to a halt.
In Israel, there was high demand, and low supply. Banks continue to require a minimum 30 percent down payment for most mortgages, and prices are climbing in all areas of the country, partly due to last year’s 10-month freeze imposed by the government on Jewish construction in Judea and Samaria. The result: a high pressure housing market developing in Israel.