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Abstract
The conspicuous rise in Israel’s housing prices from 2008 to date, after the stable prices in the early 2000s, has raised concerns of a property bubble in the Israeli economy. The grave effects of real estate bubbles that emerged in various countries around the world throughout history and led to severe long-term economic crises within the country and elsewhere add to the concern about such occurrences in the Israeli economy. This article focuses on the current effects of the real estate bubble on Israeli society at the preliminary stage, and examines the sociodemographic implications of Israel’s rise in housing prices and its impact on several social parameters, such as the average number of members in a household, Israel’s residential density, age at marriage, the extent of emigration from the country among the young, the population’s spread to peripheral areas, the inequality index, and more.
Notes
1. Until the second quarter of 2015.
2. See Weinstein, Japanese Economic Crisis, 164; Ito and Iwaisako, “Bubbles in Japan,” 143–93; Stone and Ziemba, “Land and Stock Prices,” 150–51; Noguchi, “Bubble and Economic Policies,” 10; Cargill, Hutchison, and Ito, “Deposit Guarantees,” 41–52; Schaede, “Financial Crisis in Japan,” 85; Ohmi, “Japanese Economic Crisis,” 61–77; Lincoln, “Japan’s Financial Mess,” 59; Saxonhouse and Stem, “Japan’s Lost Decade,” 485.
3. See Kregel, “Changes in the US Financial System,” 1848‒80; Gjerstad and Smith, “Monetary Policy,” 272; Blundell-Wignall and Atkinson, “Subprime Crisis,” 55–102; Gwinner and Sanders, “Subprime Crisis,” 6; Hellwig, “Systemic Risk,” 129–207; Whalen, “Subprime Crisis,” 219–35; Serkan, “Behavioral Approach,” 190; Sagemann and Reese, “Great Subprime Credit Crisis,” 21‒63; Arner, Global Credit Crisis, 91–136; Brown and Davis, “Prime Crisis,” 16–28.
4. Blanchard, “Speculative Bubbles,” 387–9.
5. See Flood and Garber, “Market Fundamentals,” 745–70; Flood and Hodrick, “Asset Price Volatility,” 831–42; Flood and Hodrick, “Testing for Speculative Bubbles,” 85–101; Aizenman and Jinjarak, “Current Account Patterns,” 75–89.
6. Taipalus, Global House Price Bubble?, 29.
7. Crowe, Dell’Ariccia, Igan, and Rabanal,, Real Estate Booms, 300–319.
8. Bordo and Jeanne, “Booms Busts in Asset Prices,” 8966.
9. Rubinstein, “Housing Prices in Israel.”
10. State Comptroller, Housing Crisis, 1–5.
11. The State Comptroller’s report states that this discrepancy is 53,000 housing units.
12. Taub Center for Social Policy Studies in Israel, “Picture of the Nation,” 11.
13. From 2.1% to 8.1%.
14. Dovman, Ribon, and Yakhin, “Housing Market in Israel,” 1–38.
15. State Comptroller, Housing Crisis.
16. Elmelech and Lewin-Epstein, Migration and Housing in Israel, 243–69.
17. Source: Israel CBS, Households by Size of Households, Table 5.1.
18. Source: Israel CBS.
19. Source: Israel CBS, Geographical Distribution of the Population.
20. Aside from the 2014 data of the Gini index, the average age at marriage and the extent of emigration among the young, since the data for this year had not been published when this paper was written.
21. This index ranges from 0 to 1, with 0 indicating complete equality and 1 indicating complete inequality.
22. The figure does not include the data for 2014, as at the time this paper was written they had not yet been published in the databases of the Central Bureau of Statistics.
23. One person per room, 1.01–1.49, 2.5–2.99, and more than three people per room.
24. The figure does not include the data for 2014, as at the time this paper was written they had not yet been published in the databases of the Central Bureau of Statistics.