CBS: in Q1 of 2022 the number of dwellings that began to be built amounted to 19,943

Encouraging data on the acceleration in the pace of apartment construction. Data from the Central Bureau of Statistics published today (Monday) show that the first quarter of 2022 was a record quarter in the rate of construction starts. The number of dwellings that began to be built in the quarter was 19,943 - an increase of 3% compared to the previous quarter and a jump of 40% compared to the corresponding quarter last year. This is the second consecutive quarter in which apartments are being built at a rate approaching 80,000 apartments per year, a record of 20 years.
One of the reasons for the increase in the pace of construction is the release of barriers created in previous years, after development budgets were halted during the previous government period and government activity was silenced. Another factor that delayed the industry was the corona plague that caused disruptions in the economy. The acceleration of the pace of construction was led by increases in the marketing of residential land by the Israel Land Authority (RMI) and an increase in urban renewal activity.
An interesting statistic is the increase in the number of construction starts within purchasing groups, which amounted to 564 in the first quarter of the year - an increase of 180% compared to the previous quarter and 250% compared to the corresponding quarter last year. It is possible that the dizziness of apartment prices brought the method of construction associations back into fashion, after years of decline following collapses and suspicions of fraud in the industry.
In the sum of the last 12 months, the number of construction starts amounted to 69,000 - a number that is supposed to provide a large increase in the current increase in demand for housing in Israel. 16.9% of construction starts were for apartments under the government subsidy program.
The failure of government policy is particularly noticeable in the data on rental construction. Only 2,280 of the construction starts were for rental housing. The data show that the government's high-profile statements about encouraging construction for rent are not being implemented, and in the coming years there will be no significant increase in the supply of apartments for rent, and no reduction in prices is expected. In the meantime, the Ministry of Finance is working harder to reduce the supply of rental housing by taxing small investors in apartments. Taxation is causing a consistent reduction in the inventory of rental apartments, at a rate of hundreds of apartments per month, and the move is helping to jump rents in cities.
The number of apartments under active construction was at the end of the quarter was 159.9 thousand, another record number that may indicate imminent relief from pressure on the housing market. Compared to the previous quarter, this is an increase of 6.2%.
A less encouraging statistic is the decline in the rate of completion of apartment construction. In the first quarter of the year, the construction of only 2,867 apartments was completed - a decrease of 13% compared to the previous quarter, and a number similar to the apartments whose construction was completed in the corresponding quarter in 2021. In the past year, 11.9 thousand apartments were built, an increase of only 2.5% compared to the same period last year.
This trend mainly reflects the slowdown that was in previous years in construction starts, due to the difficulties of functioning of the previous government and the corona plague. This slowdown is considered to be the main factor in accelerating the rise in housing prices in the first quarter of the year.
Another problematic figure is the increase in the duration of construction of a building, from 30.9 months at the end of 2021 to 31.1 at the end of the first quarter of 2022. The continuation of the pace of construction is one of the factors that increase supply and reduce construction.