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Israel unlikely champ in global real estate

AMY TEIBEL AP
Israel unlikely champ in global real estate - Israel - property market


JERUSALEM — Israel, despite perennial fears of war, has emerged as one of the hottest — and least likely — property markets in the world: Since real estate collapsed around the globe in 2008, at least one industry watchdog lists it as the fastest-rising property market on earth.



But with global economic meltdown — and the subprime mortgage fiasco that precipitated it — still fresh in people's minds, officials are stepping up efforts to rein in its overheated property sector. The fear is that a property bubble could shake confidence in an economy that withstood the worst of the world's financial crisis.

In the span of months, the central bank has raised interest rates several times and the government is rallying to build new units in this land-strapped country.

"The housing market has set off enough crises, and we're not going to let that happen in Israel," Bank of Israel Governor Stanley Fischer said earlier this month in announcing his sixth rate hike in just over a year.

According to Global Property Guide, a trade magazine that monitors the housing market, Israeli housing prices in the second quarter of 2010 rose sixth-fastest in a ranking of 36 countries. Four of the top five, including Singapore and Latvia, were rebounding from sharp price drops. So looking at the past two years ended in June — the last period for which there is data — Israeli real estate clocks in at No. 1.


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