Real Estate in Israel
An Israeli real estate development. Photo by Ofer Vaknin
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Haaretz
Housing prices infographic Photo by Haaretz

The steep rise in housing prices in Israel over the past five years was the third highest among 55 countries surveyed by international real estate firm Knight Frank. On the other hand, the survey showed no change in housing prices here over the past 12 months.

The London-based firm’s most recent Global House Price Index, which is based on central bank data from around the world, shows that between the third quarter of 2007 and the end of June of this year, housing prices in Israel increased by 52.7%.

The international location with the steepest rise in housing prices during the same period was Hong Kong, where prices rose by 98.8%. Although Hong Kong is now a tiny, autonomous region of China, the rest of China was treated separately and came in second worldwide, with an increase of 71.2%.

Israel has maintained its multiyear third-place ranking since 2009, when residential real estate prices skyrocketed by 21%. The following year, 2010, they rose by an additional 16%. The fact that Israel retained its third-place standing in the five-year survey was the result of the sharp rise in prices during those years rather than over the past year, when the firm’s data showed no increase in average housing prices here.

For the past year, therefore, the firm ranked Israel 31st out of the 55 countries in terms of housing price increases. ‏(Those further down the list actually experienced a drop in average prices.‏) For the first half of this year, the firm reported that housing prices in Israel increased by 1.9%, based on Bank of Israel data.

The countries showing the steepest rises in prices this year include Brazil at 18.4%, Austria at 11%, Turkey at 10.5% and Russia at nearly 10%. Among those at the bottom of the list are financially troubled euro-zone countries that have experienced major declines in real estate prices, including Portugal ‏(down 7.9%‏), Spain ‏(down 8.3%‏), Greece ‏(down 10.3%‏) and Ireland ‏(with declines of 14.4%‏).

Europe had nine of the 10 bottom rankings on that list, but average prices in China have also declined sharply so far this year, by 7.1%.

Knight Frank also reported that housing prices worldwide rose on average by 1.1% in the second quarter of this year alone − the largest quarterly increase since the last three months of 2009.