Tel Aviv housing is overpriced, approaching bubble risk - UBS

• Published date: 13 October 2021
• Author: ZEV STUB
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

Among 25 major cities around the world, Frankfurt, Toronto, and Hong Kong exhibited the most elevated risk levels on housing markets. However, Tel Aviv housing, like most other cities surveyed, is starting to look like a bubble, the report said.

"In Tel Aviv, falling mortgage rates and rapid population growth have pushed up prices," the report said. "Moreover, the government has lowered the purchase tax for second homes, even encouraging housing market speculation as the market again approaches bubble risk territory. As a result, the market is highly overvalued."

Housing prices around Israel have risen an average of more than 8% in the past year, and experts estimated that apartments cost 2-3 times more than they did a decade ago.

Economists say the main reason prices continue to rise is the high demand and the lack of supply in the housing market. The government has made controlling skyrocketing price levels one of their central economic goals, although it remains unclear how they intend to do so.

Worldwide, the...