Housing prices: why can’t the government stop them?

Programs such as the tax on a third apartment and the tightening of conditions for obtaining a mortgage try to harm demand instead of solving the problem. How did we get to this situation? Yair Levy on the reasons for the price increase and the housing crisis loop=0&rel=0&showinfo=0&theme=light&disablekb=1″ width=”100%” height=”290″ frameborder=”0″ allowfullscreen=”allowfullscreen”> Year after year, Housing prices in Israel continue to surge forward, without any proportion, and for thousands of young people in Israel the dream of buying an apartment is getting further and further away. The government and the finance minister are full of good intentions and are trying to curb housing prices with all kinds of programs… and the prices? Just keep going up. Why do housing prices refuse to fall? Why is this happening: First, because of the interest rate – the interest rate in Israel depends on the world economy, and as long as the interest rates in the world are zero, our interest rate will also be at the same levels. Apartment = provident fund of 20 years ago, in order to lower the demand for apartments, the state is trying to damage the viability of the investment: the Bank of Israel has tightened the conditions for receiving financing, and the Minister of Finance is leading the tax plan for a third apartment, which means imposing a tax on income that has already been paid for tax purposes. These measures “punish” the investors, and this despite the fact that in today’s economy, an apartment is the safest investment channel and is comparable to a provident fund of 20 years ago. The lack of a comprehensive solution and what about the price for the tenant? There is no big news here either, as the program is structured so that only virtuous individuals who won the lottery receive a grant of NIS 400-800 thousand from the state. And the others? is nothing. There is no comprehensive solution here for all young people who are unable to purchase an apartment at today’s market prices. If so, what is the solution? It seems that under the conditions created in the economy, only a national emergency plan will lead to the revival of the housing market and guarantee the ability of the younger generation to build a home in Israel, literally.