A Housing Plunge Doesn't Concern Israel's Top Economic Adviser
- Country’s decade-long housing bull market is losing steam
- Central bank says economic shock could endanger households
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Israel’s economy is strong enough to weather a steep drop in housing prices, according to the prime minister’s top economic adviser, a view at odds with central bank warnings.
With a decade-old housing boom appearing to wind down, Avi Simhon, who heads Benjamin Netanyahu’s National Economic Council, said banks can withstand a 25 percent decline in home prices without any major problems. He added that because the typical value of a loan is low relative to property prices, even a 50 percent plunge, a level typically seen as catastrophic for an economy, wouldn’t destabilize the banking system.