The unregulated private rental sector and the impact on Israeli housing market |
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Institution: | 1. Western Galilee College, Department of Economics, Israel;2. University College London, Cancer Institute, Department of Cancer Biology, United Kingdom;1. Faculty of Economics and Management of Tunis, University of Tunis El Manar, Tunisia;2. School of Business, Newman University, Birmingham B32 3NT, UK;3. School of Management, Swansea University, Bay Campus, Swansea SA1 8EN, UK;4. Teesside University International Business School, Teesside University, Middlesborough, TS1 3BX, UK;1. University of Bonn, Germany;2. University of Warsaw, Poland;1. Insper, Brazil;2. University of Sussex, UK;1. Centre for Policy Research & International Studies, Universiti Sains Malaysia, Malaysia;2. Sunway Business School, Sunway University, 47500, Selangor, Malaysia;3. Department of Economics, University of Colorado Boulder, USA;4. Department of Urban Industrial Management and Marketing, University of Taipei, Taiwan |
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Abstract: | Israel’s rapid population growth, deriving from its unique demographics, is generating a consistent rise in the demand for residential housing. The low interest rate environment in Israel since the beginning of the last decade has also contributed to the rise in demand for housing, which exceeded the available supply and led to a continuous rise in the price of housing. The various government programs all attempted to halt the rising prices, with no long-term success, if any. Policymakers focused on making ownership of housing affordable for young couples but directed their activity at repressing the demand for housing among investors and housing upgraders. This interpretive article focuses on analyzing Israel’s housing policy and indicates the built-in failure engrained in this policy, as the demand for housing in Israel is a rigid demand deriving from the country’s demographics and values and therefore attempts at repressing it are futile in essence. The housing policy aimed at making housing affordable for young people must examine, before it is finalized, their overall incentives to own housing on one hand and the obstacles they encounter that prevent them from opting for rentals on the other, and accordingly formulate the features and different terms of the policy. The research conclusion indicates the need to implement a public policy that will promote the rental alternative as an efficient way of meeting the demand for housing on one hand and of curbing the price of housing on the other. |
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Keywords: | Demography Real estate Rental Housing Market Regulation Public policy |
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