The Residential Property Price Index in Palestine (RPPI) – First Quarter 2022

The overall index has increased

The PMA has released the results of its Residential Property Price Index in Palestine (RPPI) for the first quarter of 2022[1], which revealed that the overall index has notably increased by around 5% to reach 113 point. The two sub-indices (apartments and houses) have grown, albeit to a varying degree. The house price index increased by around 5.8% compared to the previous quarter, while the price index of apartments has risen in most Palestinian cities by around 3.4% on average.

These developments come in light of a general wave of price hikes locally and globally, especially the increasing prices of building materials, which has clearly increased the cost of construction. Moreover, the USD and the JD depreciation against the NIS contributed to raising the prices of real estate offered for sale in these two currencies, as this depreciation has prompted real estate owners to raise the asking price in order to compensate for the exchange rate losses.

Moreover, the asking price is affected by many factors and specifications, most prominently: the price of the land on which the property is located, in addition to the geographical location and neighborhood, type (apartment or house), condition of the property (new or used), property area, and land area (for houses). Adding to that, the age of the property, the number of bedrooms and bathrooms, services attached to the property such as central heating, parking, an elevator (in the case of apartments), and others.

In the same context, it is important to mention that by issuing this index, the PMA aims at monitoring the real-estate market and its prices' fluctuations in order to avoid possible price bubbles. Moreover, it uses this index as an input for the economic policies, especially macroprudential policies, taking into account their important influence on individual decisions of consumption, savings, and investment.