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Will Israel's finance minister be able to lower housing prices?

During his election campaign, Finance Minister Moshe Kahlon promised to lower housing prices, but is now finding it hard to fulfill his promise and working to lower the expectations of his disappointed public.
A man walks near a "for rent" sign posted on a newly-built residential building in Jaffa, just south of central Tel Aviv, January 4, 2010. Almost 500 Arab families are struggling to keep a toehold in Ajami, the Arab section of Jaffa that is rapidly becoming an artsy alternative to the brash modernity of Israel's metropolis Tel Aviv next door. Picture taken January 4, 2010.      To match feature ISRAEL-ARABS/PROPERTY       REUTERS/Gil Cohen Magen (ISRAEL - Tags: POLITICS BUSINESS SOCIETY) - RTR28TF5
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“Nothing is going to be like it was 10 years ago,” admitted Finance Minister Moshe Kahlon when he was asked on Army Radio whether he agrees with economists who hold that a moderate reduction in housing prices will be enough to avoid creating an economic crisis. Kahlon said, “I think that’s right. We don’t want to create crises in any area. We want a normal economy.”

The March 3 interview with Kahlon, a year after the March 2015 elections, took place amid reports of a continuing rise in housing prices. Only last month, the government appraiser reported an 8% increase in housing prices in 2015, when the Israeli public still hoped that the real estate bubble had reached its breaking point and was about to burst. 

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