Rising minister takes on Israel's surging home prices

Jerusalem

MOSHE Kahlon, who has been designated to become Israel's next finance minister, has promised to rein in surging home prices the same way that he slashed mobile phone service fees as communications minister.

It will not be that easy, said Ben-Zion Zilberfarb, a former Finance Ministry director-general. "If the expectations are that as soon as he gets in to office, we will see a dramatic change in the price of housing, it's not going to happen," said Mr Zilberfarb, now dean of the School of Banking and Capital Markets at Netanya Academic College. A tangled bureaucracy, drawn-out construction programs and a land shortage in high-demand areas make the industry less nimble, he said.

High housing prices became a key issue in last week's election after the state comptroller faulted Prime Minister Benjamin Netanyahu's government for not containing them. While convoluted planning and building processes have damped supply, demand has been fuelled by 13 rate cuts since 2011 that have driven down borrowing costs to 0.1 per…