Finance Minister Yair Lapid accused Israel’s building contractors of over-charging for housing and called on construction companies to forego profits for the benefit of young middle class couples. But Lapid stopped short of proposing a genuine free-market solution to Israel’s housing crisis: A massive buidling project in Judea and Samaria.
Speaking to the Globes financial daily, Lapid said he had proposed a series of steps to bring down housing prices in Israel, including exempting first-time home buyers from value added tax. But he pointed out that although land prices have fallen in Israel in recent years, housing prices have continued to rise over the same period of time. That, he said, is a clear sign of one thing: Greed.
“The real estate market enjoys a huge profit margin,” Lapid said. “Over the past four years, land prices have dropped, but housing prices have risen by 64 percent. The contractors certainly have places they can cut back.”
Lapid stressed that he does not want to put small contractors out of business by demanding they drop prices on their products, but he also warned there would be a “transition period” that could harm some builders.
While the finance minister – who in the past has referred to Jewish building in Judea, Samaria and Jerusalem as a “double mistake – seems undeterred by the anti-capitalist notion that the state should set prices in a free market, he has also apparently refused to consider another free-market solution to Israel’s ongoing housing crisis: Massive building in Judea and Samaria.
Bringing thousands of new homes onto the market in Ariel, Gush Etzion and further afield would presumably lead to a sharp drop in housing prices in Tel Aviv, Jerusalem and other major Israeli cities. A building project would also ensure the livelihoods of small and large construction companies alike.
Instead, Lapid said he is concentrating on a series of tax-related measures, and the hope that builders will forgo some of their profits.
“These steps will bring down housing prices,” Lapid said.
About the Author: Avi is a news writer for The Jewish Press. In the past, he has covered Israel and the Jewish world for Israel National News, Ami magazine and other international media.
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