House Prices and Property Demand Rising in Israel

Better than expected economic growth is fueling a rise in house prices and stronger property demand in Israel these days. Despite daily fears of violence and security threats from area militia groups, the real estate markets in the 8,500-square-mile Middle East country are prospering, according to various media and analyst reports. Still, there is a shortage of affordable housing while rents in established neighborhoods are rising. Thriving real estate markets are seen in the Northern district, Qrayot Haifa and Jerusalem. Global Property Guide, published in Bristol, England, notes third-quarter growth in the Northern district was 4.8%; Qrayot Haifa, 2.5%; and Jerusalem, 2.7%. Israelis are spending more on consumer goods at the same time as the country's export business is growing. Those two factors are considered crucial to the real estate market health in the small country. With an estimated population of only eight million, Israel, in land size, is just a little smaller than New Jersey's 8,700-square-miles. According to Israel's Central Bureau of Statistics (CBS), the average price of owner-occupied residences rose by 2.56% to ILS 1,132,000 (US $299,086), after a year-on-year rise of just 1.11% in the second quarter, and a decline of 1.56% in the first quarter of this year. One Israeli New Shekel (ILS) equals 27 cents U.S.