Bank of Israel study: No housing bubble

Home prices rose 35% in real terms between December 2007 and August 2010 - an average rate of 12% a year.
10 July 11 12:35, Guy Katsovitch

"We find no evidence of a housing bubble as of August 2010. If there is a bubble, it is in the early stages and is not yet seen in the data," state Bank of Israel researchers Dovman Polina, Ribon Sigal, and Yakhin Yossi in a report, "The Housing Market in Israel 2008-2010: are house prices a bubble?"

The researchers note that home prices rose 35% in real terms between December 2007 and August 2010 - an average rate of 12% a year, well above their long-term growth rate. This raised concern that the rise in home prices was disconnected from the market fundamentals, and was based on expectations of capital gains and the development of a bubble process.

The researchers examined home prices from the perspective of the rent-income ratio and then based on a comparison of the standard property pricing with the fundamental price, which is derived from three different methods.

Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2011

tel aviv 17th most expensive city for housing prices, 30th for renting


price per square meter:
monaco - 53,226 $
london - 20,505 $
hong kong - 19,323 $
paris - 18,066$
simgapore - 16,727 $
moscow - 13,910 $
tokyo - 13,855 $
new york - 13,428 $
tel aviv - 7,200 $
sydney - 6,960 $
toronto = 6,179 $
amsterdam - 6,070 $
quito - 981 $

rents averages survey for 120 sqm apartment:
monaco - 9,212 $
london - 8,830 $
new york - 6,304 $
tokyo - 6,235 $
tel aviv - 2,322 $

years of average rent to purchase 120 sqm:
taipei - 64 years
monaco - 58 years
tel aviv - 30 years
sidney - 24 years
london - 23 years
new york -21 years
kishinev - 9 years
lima - 9 years

data : global property guide