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Bethel Finance news:
"Continuation of building at the pace characteristic of the past year is liable to cause an uncontrolled collapse of home prices," warns Bank Leumi. The bank says that there were an annualized 41,400 housing starts in the third quarter of 2011, which despite a slight drop, was still substantially higher than in the past.
Bank Leumi states, "The change in direction in housing starts conforms to the change in the background conditions in the housing market, reflected by the drop in demand."
The banks says that if the housing supply falls sharply to the levels prevalent in the past few years, this was liable to cause a housing shortage, and drive home prices higher. However, it also warns that continued large-scale construction is liable to cause a freefall in prices.
Bank Leumi concludes, "Sagacious planning on the supply side and agreement between policy makers are the necessary conditions to stabilize activity in the real estate sector and the economy as a function of the effect on home prices."
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