Israel’s housing market

Philip Hemmings, Head of Israel Desk, Economics Department, OECDGlobes Conference December 2011

The market has turned around

An unusual history of price developments

A small upswing in prices compared to some markets

No (very loud) alarm bells (yet) in other indicators

Conservative mortgage lending

• Virtual absence of securitisation

• Low loan-to-value ratios

Possible contingency measures

• Reversal (perhaps partial) of macroprudential measures

• Tempering of efforts to encourage new housing construction

Distinctive features of Israeli housing support

• Unusual objective function

• Highly centralised

Notable common challenges in housing support

• Diversion of support

• Mobility traps

• Coherence with other benefits and the tax system

The in-depth chapter recommends

• A simpler and more transparent system

• Some specific adjustments to help make better use of spending

Thank you!