Housing Starts Almost Unchanged in 2016

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Housing in Rishon Letzion (illustrative).Credit: Ofer Vaknin

The number of housing starts declined slightly last year from 2015, despite the government’s efforts to boost the supply as a way to cool off an overheated housing market, the Central Bureau of Statistics reported Wednesday.

The number of homes begun in 2016 fell to a preliminary 52,400 from 52,800 the year before and came out well below the government’s target for 60,000 new homes. The pace was uneven, with Jerusalem seeing a 30% plunge in starts to 2,053 while Tel Aviv saw a 7% rise to 2,533.

The failure to bring about a big rise in home construction was the latest piece of bad news for Finance Minister Moshe Kahlon after the CBS last week reported that a decline in home prices in the 30 days to December 15 appeared to be a one-off event, and that prices rose 0.5% in the month to January 15. That left them up 6.3% for all of 2016.

Prime Minister Benjamin Netanyahu signed an agreement with China this week to bring in thousands of Chinese workers to help alleviate a shortage of skilled construction workers and six foreign building companies have been authorized to build homes in Israel.

Kahlon, who has put the housing crisis at the top of his agenda, said in an interview with TheMarker on Tuesday that he was convinced the market was turning around.

“Addressing housing takes time, but we’re heading in the right direction. At the end of the day, the steps we’re taking will affect home prices,” he said at a conference sponsored by TheMarker. “I see the pace of sales in building projects and all the [construction] plans being approved, and I’m satisfied, very satisfied.”

The CBS the number of homes completed rose 4% last year to 45,400. All told, some 112,200 units are in various phases of construction, the highest number since 1996, it said.

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