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How to Improve the Economic Policy Framework for the Housing Market in Israel

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  • Philip Hemmings
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    Abstract

    Israeli house prices have risen by over 50% over the past three years. In part this reflects the fact that for several years housing construction had not kept pace with increases in the number of households. In response to these developments, hitherto sluggish planning-approval processes are being speeded up. However, in addition low interest rates have been boosting demand, and there are concerns that prices have already been driven to bubble levels. Efforts have been made to subdue demand, and the market has cooled off somewhat, but there remains a risk of a hard landing with a sharp downward price correction and a contraction in construction activity. Recent price developments are not the only economic issue in Israeli housing. As in a number of other OECD countries, housing policies favour home ownership through tax settings and subsidies for house purchase, potentially raising issues of labour mobility. More generally, housing support (public housing and rent support as well as subsidies for purchase) endeavours to fulfil an unusually wide policy agenda that goes beyond simply assisting low-income households with their housing needs. This Working Paper relates to the OECD 2011 Economic Survey of Israel (www.oecd.org/eco/surveys/Israel). Marché du logement : comment améliorer le cadre de politique économique en Israël Ces trois dernières années, les prix des logements ont bondi de plus de 50 % en Israël. Cette envolée tient notamment au fait que, pendant plusieurs années, la construction de logements n'a pas suivi le rythme de l'augmentation du nombre de ménages. Face à cette situation, des mesures ont été prises pour accélérer les procédures relatives à l'aménagement du territoire, jusqu'à présent très lentes. Cependant, le faible niveau des taux d'intérêt stimule la demande de logements, et certains craignent que la hausse des prix n'ait déjà pris des proportions de bulle. Les autorités israéliennes s'efforcent de tempérer la demande, et une certaine détente du marché a pu être observée, mais il subsiste un risque d'atterrissage en catastrophe, qui se traduirait par une correction brutale à la baisse des prix et une contraction de l'activité dans le secteur de la construction. Le marché du logement israélien n'est pas seulement affecté par la flambée récente des prix : comme dans d'autres pays de l'OCDE, les politiques du logement favorisent l'accession à la propriété au moyen de mesures fiscales et de subventions à l'achat, ce qui pourrait avoir des conséquences négatives sur la mobilité de la main-d'oeuvre. D'une manière plus générale, l'aide au logement (qui englobe les logements sociaux, les allocations logement et les subventions à l'achat) est axée sur un éventail particulièrement vaste d'objectifs de l'action publique, qui va bien au-delà de l'aide aux ménages à bas revenus en matière de logement. Ce Document de travail se rapporte à l'Étude économique de l’OCDE d’Israël 2011 (www.oecd.org/eco/etudes/Israël).

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    File URL: http://dx.doi.org/10.1787/5kg0sjfjqz9x-en
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 912.

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    Date of creation: 06 Dec 2011
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    Handle: RePEc:oec:ecoaaa:912-en

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    Keywords: construction; property tax; mortgages; Israel; Israeli housing market; Israeli house prices; rental market; rent subsidy; mortgage support; mortgage subsidy; housing; housing support; housing markets; rents; public housing; planning regulation; rent support; règlementation relative à l'aménagement du territoire; allocation logement; logement; subvention à la location; loyers; logement social; aides au logement; construction; prêts hypothécaires aidés; subventions des prêts hypothécaires; marché de l'immobilier; marché de l'immobilier locatif; prêts hypothécaires; marché de l'immobilier israélien; prix des logements israéliens; impôt foncier; Israël;

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