Attempt to Cherry-Pick Israel Housing Data Backfires on Kahlon
(Bloomberg) -- Finance Minister Moshe Kahlon has staked his political reputation on bringing down Israeli housing prices that have more than doubled in the past decade. Critics this week accused him of trying to quash data showing he’s failing.
After a report by the government’s assessor said prices have climbed in recent months, the Finance Ministry asked an inner cabinet on housing Monday to declare that the statistics bureau -- whose data point in the opposite direction, showing that costs fell -- would be the only source of information on the matter. Debate on the subject was deferred, local media reported. Kahlon’s aides denied any political motivation.
Soaring housing prices, partly driven by record-low interest rates, have been at the center of Israeli political debate since they led to mass protests in the summer of 2011. Kahlon has sought to boost supply of new apartments but his efforts haven’t yet delivered concrete results, with the rate of housing starts slowing down in the first half of this year. Recent polls show his Kulanu political party losing popularity.
A trade group saw Kahlon’s move as politically motivated, noting that his ministry acted when Justice Minister Ayelet Shaked, was out of town. The assessor’s office, which reported the increase in prices, is part of her ministry.
“They want to turn us into the Soviet Union by controlling the data the public gets to see,” Ohad Dannus, chairman of the Real Estate Appraisers Association in Israel, said in a telephone interview.
“The Finance Ministry is having trouble bringing home prices down, so instead of just simply increasing the housing supply, it’s wasting its time with counter-productive maneuvers,” Dannus said.
Not true, said budget director Amir Levy. Speaking on Israel Radio, he said the ministry wants to give a single reliable piece of data. Conflicting information only confuses the public, he said.
“No one’s as transparent as the CBS,” Levy said, noting that the statistics bureau breaks down the data by cities and other categories. “You have all the information.”
While the two sets of data aren’t entirely comparable because they refer to different periods, they point in opposite directions.
According to the statistics bureau, prices fell 0.3 percent in the May-June period from the two months before. The assessor said they rose 2.5 percent in the second quarter from the first quarter, and 8 percent on the year.
The assessor doesn’t take into account apartments sold under an affordable housing program the Finance Ministry expanded while the statistics bureau does, Dannus said. Those apartments can’t be sold for five years and therefore skew the picture of what’s going on in the housing market, he said.
Housing prices aren’t the only figures that are issued by multiple sources. Both the statistics bureau and the Employment Service, for example, put out figures related to the job market.