Israel's Central Bank: Housing Prices Up 10% in Past 12 Months

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Housing prices in Israel have risen 10.1% in the past 12 months, the Bank of Israel stated on Wednesday in its report on the economic development over the second and third quarters.

According to the report, economic growth slowed down to 2.2% in the third quarter from 4.6% in the second quarter this year. The central bank attributed the high growth in the second quarter largely to the beginning of the use of domestic natural gas production, stating that growth in both quarters was slower when the impact of natural gas was removed. The slowdown in the third quarter was attributed to ongoing weakness in Israel’s export sector, affected in part by the slow economic recovery in the developed countries.

In contrast, the central bank said that local demand grew in both quarters, encouraged by the low interest rate set by the bank. Private and public consumption as well as investment grew, but the bank said that compared to the past more of the demand generated in these areas was met by a growth in imports and not by domestic production.

Imports grew 6% over the two quarters compared to the preceding six months, due in part to the appreciating value of the shekel.

New upscale housing under construction in north Tel Aviv. Credit: Nir Keidar

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