Central Bureau of Statistics: construction starts in 2021 amounted to 63,330,000 - 13% increase

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by Ifi Reporter Category:Real Estate Mar 20, 2022

2021 was a record year in the real estate market and not only in terms of prices and sales of apartments. Data published by the Central Bureau of Statistics (CBS) summarizes the number of construction starts in 2021 amounted to 63,330,000 apartments - a record not observed since 1995. This is an increase Of 13% compared to 2020, when construction began on 55,990 apartments.
The data is set against the background of statements by Finance Minister Avigdor Lieberman on new measures to cool price increases, the launch of a new lottery for 10,000 discounted apartments funded by the government, and an announcement by the Bank of Israel limiting the banks' credit risk in the industry. According to experts, about 200,000 apartments are missing in Israel today.
In 2021, building permits were issued for 76,340,000 apartments - an all-time record. About half (48.4%) of the total number of dwellings with permits issued were in the Tel Aviv and Central Districts. About 1.4% of the apartments in the permits are for the purpose of regulating illegal construction. 151.4 thousand apartments were in the phase of active construction - also an all-time record.
As for the data on the completion of construction, in 2021, the construction of approximately 46,780 apartments was completed. The largest number of dwellings whose construction was completed in 2021 was in the Central District, about 23.5% of all dwellings, while in the Jerusalem District - only about 5.7%. The average construction time of a building in 2021 was 26.7 months, while the average weighted construction time according to the number of apartments in the building is 30.9 months.
The real estate industry jumped in the fourth quarter, after showing a 32.9% increase in construction starts compared to the third quarter. About a quarter (24.8%) of all dwellings that began construction in 2021 were in the Tel Aviv district, while in the Jerusalem district only 9%.
20.2% of the dwellings that began construction (approximately 12,760) were under a government subsidy. The largest number of dwellings under a government subsidy was in the Central District - about 3,680 dwellings, which is 28.9% of the total dwellings built within this framework. About 2,120 apartments, which are about 3.3% of the total construction starts, were built for the purpose of renting. Of all the dwellings in the new buildings that began construction, about 14.3% were built in buildings with 2-1 dwellings (single houses and two-family houses).
According to the data, the localities in which construction began on more than 2,000 apartments during 2021 were Tel Aviv-Yafo (5,052), Ashkelon (3,743), Jerusalem (3,175), Rishon Lezion (2,692) and Bat Yam (2,105). The localities where the increase in construction starts recorded in 2020 continued in 2020: Gan Yavne, Hadera, Kiryat Malachi, Kiryat Bialik, Afula, Nahariya and Ashkelon. Among the localities in which there was a significant increase in the number of dwellings that began construction in 2021, after declines recorded in 2020 were Mevaseret Zion, Bnei Brak, Or Akiva, Bat Yam, Petah Tikva, Herzliya and Ofakim.
As for urban renewal, in 2021, the construction of about 9,700 apartments began as a result of the demolition of an existing building and the construction of a new building, about 60.7% were built in the Tel Aviv district, and about 23.8% - in the Central District. Of the dwellings that began construction, as a result of the demolition of an existing building and the construction of a new building, about 6,130 dwellings were built under NPA 38/2. The number of dwellings that began construction after demolition was 3 times higher than the dwellings actually demolished (about 3,060 dwellings).
In 2021, construction began on approximately 4,250 apartments, as construction additions to existing buildings. About 28.1% of them were built in the Tel Aviv district and about 18.9% in the Central District. In the northern and southern districts about 13.8% and 13.2% were built, respectively. Of the apartments that began construction as additions to existing buildings, about 2,660 apartments were built as part of the plan to strengthen the buildings and add floors to existing buildings known as Theme 8. 60.7% were built in the Tel Aviv district, and about 23.8% in the Central District. Of the dwellings that began construction, as a result of the demolition of an existing building and the construction of a new building, about 6,130 dwellings were built under NPA 38/2. The number of dwellings that began construction after demolition was 3 times higher than the dwellings actually demolished (about 3,060 dwellings).
In 2021, construction began on approximately 4,250 apartments, as construction additions to existing buildings. About 28.1% of them were built in the Tel Aviv district and about 18.9% in the Central District. In the northern and southern districts about 13.8% and 13.2% were built, respectively. Of the apartments that began construction as building additions to existing buildings.
The president of the Contractors Association, Raul Srugo, responded: "The volume of construction starts is much lower than what the state has to produce now. We estimate that the volume of demand for apartments added in the last year is at least 80,000 housing units. This does not include Remi's practice is not to market all the land for construction that it can. Everything that exists must be marketed. The government must immediately freeze land prices and at the same time, market unplanned land that the developers themselves will plan. Notices of marketing or advertising marketing prior to the sale of land are not sufficient - the only measure in this regard is the volume of actual transactions in which the land was sold. The state must act to reach the scope of starting an annual construction of at least 100,000 housing units. Only such a scale could change the trend in the housing market. "

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