Israel Enters New Year With Stronger Shekel, Falling Housing Prices, Rising Living Standards
As Israel approaches the Jewish New Year תשפ"ז (5787), the country is experiencing a period of economic recovery and optimism following nearly three years of conflict, high cost of living, and uncertainty. Key indicators point to a strengthening Israeli shekel, a decline in housing prices, and an overall rise in living standards.
The Israeli shekel has shown significant strength, appreciating against the US dollar and ranking second globally in its gains over the past year. This has made international travel more affordable for Israelis, with destinations in Eastern Europe, the Caucasus, Greece, and Cyprus becoming popular alternatives to previously favored locations like Turkey. Even distant destinations like Japan and China have become more accessible due to currency shifts.
Housing prices have seen a modest decrease of 1.5% over the past year, translating to significant savings for prospective buyers. While still expensive, this trend is expected to improve housing accessibility. The market currently has a surplus of unsold homes, sufficient for 26 months at the current sales pace. The job market remains robust, with approximately 148,000 job openings across various sectors, including sales, engineering, and software development, indicating a strong demand for labor.
Living standards have notably improved, with a 12.8% increase in the second quarter of the year compared to the same period in 2023, before the war. Projections suggest a 5.8% rise compared to the previous year. Israel's GDP per capita has reached approximately $69,800, placing it eighth among OECD countries. Despite higher purchasing power parity adjustments, Israel's economy has grown substantially, with its total GDP increasing by 23.3% in the past year.
Healthcare outcomes also show positive trends, with life expectancy at 83.8 years, ranking fourth globally. Preventable death rates are low, and Israel excels in preventative care and public health screenings, surpassing OECD averages in areas like breast cancer screening. Patient satisfaction is high, despite lower healthcare expenditure as a percentage of GDP compared to other developed nations. The healthcare system is noted for its efficiency, requiring fewer hospital beds per capita than the OECD average.
Public wealth has also grown significantly, with financial assets increasing by 15.3% year-over-year and 35% since October 7, 2023. Israelis report higher levels of happiness, ranking eighth globally. The agricultural sector is recovering, with abundant local produce available, though challenges remain regarding import policies and water resource management for irrigation.
