Why Israel's Boom Is Actually A Bubble Destined To Pop

[Jefferson23]

2. Yep, from May of this year:

snip*Israel’s housing market is clearly one of the world’s bubbliest. Since 2007, home prices in the country are up nearly 84%.

snip*Robert Shiller, who won last year’s economics Nobel for his work on bubbles, says the Israeli market looks like a bubble. The IMF has warned that the probability of a “bust” is about 20%. In recent research, Goldman Sachs economists have spotlighted Israel’s outlier status, even among other countries that have seen “striking increases in house prices” since the global financial crisis (GFC).

snip*The main thing that makes Israel different is simple: There’s not a lot of usable land. A population of about 8 million lives in an area smaller than New Jersey or Sicily. But more to the point, the vast majority of land is owned, quasi-owned or administered by a state body, the Israel Land Administration. (More than 90% of it, according to the OECD.) And the state involvement makes for quite a bit of red tape, generating bottlenecks in the supply of new housing.

“Bottlenecks” might not be what you think of if you’re accustomed to hearing news reports about Israeli home construction in West Bank settlements. (In few other places are land-use decisions as freighted with historical, political, ethnic, religious, military, strategic, geopolitical and moral questions.) But building in settlements is only a small fraction compared to what happens in Israel proper. West Bank construction (not including East Jerusalem, though the rest of the world considers that part of the West Bank too) accounted for just 3.3% of the roughly 42,000 new dwellings completed in 2013.

http://qz.com/209093/israels-housing-bubble-is-glaringly-obvious/