Professional criticism: The rise in apartment prices according to the CBS – an appearance of stability in a centralized and regulated market

Professional criticism: The rise in apartment prices according to the CBS – an appearance of stability in a centralized and regulated market

The Central Bureau of Statistics announced that apartment prices rose by 0.9% in January-February 2025, and by 7.5% compared to the same period last year. However, a critical and in-depth examination of the data raises fundamental questions about their economic significance, their reliability as an indicator of a free market, and most importantly, their relevance to understanding the true state of the real estate market.

1. The transactions measured represent price – not value

• The housing price index is based on transactions that were actually carried out, but does not consider the economic feasibility of the transactions .
• In a reality of stagnation, very low transaction turnover, and a limited scope of an active market - any unusual transaction, for example a luxury apartment in Tel Aviv or an apartment in an aggressive marketing campaign, distorts the overall picture.

2. Geographic segmentation – significant distortions

• The districts with sharp increases – North (1.8%) and Tel Aviv (1.5%) – are also areas where the number of transactions is very small. This means: significant statistical deviation and high sensitivity to edge transactions.
• The Central District actually recorded a slight decrease of 0.3% - evidence that the trend is not uniform and does not present a stable picture of "increases."

3. New apartments – not really more expensive

• The CBS reports a 1.0% increase in new apartment prices, but does not take into account benefits, smart discounts, creative financing, and transactions with contractors that are made in non-transparent ways. The reported price is only official – not necessarily what was actually paid.
• This market suffers from an "imaginary price" bias, a result of manipulative marketing that inflates the tag price.

4. An annual increase of 7.5% – contrary to economic reality

• The data ignores clear macroeconomic factors: high interest rates, economic recession,