Israel has quickly bent to the harshest neoliberalism ever, this is the main explanation of this event. The high rent and home price issues are the same in all major economic capitals in the world (NYC, London, Paris...) where young people are in the same situation as their Israeli counterpart. Depressed wages growth due to job delocalisation has generated a very low inflation and has implied very low interest rate. Lenient monetary policy all over the world has poured flows money that supported the high increased of non financial assets (lands, real estate, commodities). One can agree that favouring investment in Judea Sameria has not helped and will not help but it is far from being the reason of the country present situation.
from the article: Blame politics for the Israeli housing crisis