The number of new homes sold in the first seven months of the year jumped 60% in comparison to the same period last year in Israel, further evidence that the government’s efforts to clamp down on a frenetic real estate market are still not working.
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The Central Bureau of Statistics said Monday the biggest increase was in the northern district, where sales of new homes shot up 134% year on year. In the southern district they more than doubled, but in the most expensive areas, the increases were more moderate: In the Haifa area, they rose 72%, in Jerusalem 50%, and in greater Tel Aviv 46%.
The total number of home sales in the seven months was 19,860.
However, the pace of new-home sales did seem to be slowing. The bureau said it rose at an average monthly rate of 5.8% in the 12 months to January 2015, slowing to 4.1% in February-April and 0.5% in May-July.
The government’s decision to raise the purchase tax, starting July 1, contributed to a last-minute surge of buying by property investors, who were most affected by the change. The higher tax is one of a series of measures that Finance Minister Moshe Kahlon has taken to try and cope with the housing crisis, which saw prices climb 4.4% through the 12 months to June 2015.
However, a report released on Monday by the Society for the Protection of Nature in Israel cast major doubts on the government’s ability to see through plans to cope with an overheated housing market.
The SPNI report said a special national planning committee set up four years ago to cut through the red tape required to get residential construction approvals failed to lead to the construction of a single new home.
The committee – which Prime Minister Benjamin Netanyahu unveiled in 2011 with the boast that it would serve as a “supertanker against bureaucracy” – approved construction of only 4,687 housing units, spread over seven projects, in 2014. That was just 7% of all the building projects winning approval.
In 2012-14, only 36 of 2,611 building projects approved by all planning bodies were sent to the fast-track committee, according to the report, which was written by Asaf Zanzuri and Itamar Ben-David.
When the committee did approve plans, it tended to do so in areas where demand was the thinnest: Some 47% of the approvals were for the southern district, or Negev; another 30% for greater Haifa; and 10% for the north. Greater Tel Aviv got only 4% of the approvals and Jerusalem about 1%, with the central district getting 8%, said SPNI, which is concerned that fast-tracking will cause environmental considerations to be ignored.
If the government wants to fast-track building approvals, it would do better to strengthen the existing planning bodies – namely, the regional planning committees – SPNI said. The planning establishment is overwhelmed with applications and is understaffed and under-budgeted. The new committee simply added to the existing bureaucracy, it said.
“The best solution to the housing problem would be to use the inventory of housing units already approved [for construction] but delayed because of various bureaucratic obstacles,” said SPNI, which called on the Knesset to rescind the law creating the national committee.