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They say the sky's the limit. Maybe, but for some countries it is unaffordable housing that is bringing people out onto the streets to protest

Of all the troubles in the world today, and especially in the perennially turbulent Middle East, who would have thought that it would be real estate that is currently causing such a major headache for the Israeli government? In July the country was engulfed by massive housing protests, which some Western commentators have even compared to the protests in the Arab world. What is the problem? The strong Israeli economy seemed to be chugging along quite oblivious to what has been going on world-wide. In the midst of the global financial crisis, while Dubai came within a hair's breadth of bankruptcy after residential prices in the emirate tumbled to less than 50 pct of their pre-crisis levels, Israel had in fact managed to buck the trend with a steady growth in the price of homes. And the trend is still ongoing, which is hardly news for those who for many years have been hoping to get on the property ladder for years. Housing prices rose 16.4 pct on average last year. In the big cities the numbers are even higher. Tel Aviv is often compared to New York - and those of you who have seen the luxury residential towers currently under construction in the city, often designed by world-famous architects, would see a clear resemblance. And such apartments come with a predictable price tag, which is why it is unsurprising that the price of the average Tel Aviv home reached USD 500,000 at the end of 2010. For the ordinary Israeli that's a hefty sum. But what about all the Israelis who are now entering the adult world with hopes of owning a dream apartment of their own? Will they ever get one? The protesters gathered in the tent city on the fashionable Rothschild Boulevard in Tel Aviv and across the country have their doubts. In July, 30,000 people marched for the cause in Tel Aviv. In August the number rose to 300,000, and some expect a one million man march to come in September. The government was quick to announce that it will offer developers incentives to build homes for long-term rental at low rates. More pledges followed - students were promised 10,000 new dormitory units, thus paying rent set by the state rather than private landlords. And in an attempt to make life outside the big cities more appealing, the government will also offer half-price train and bus fares for students who commute to university. The protest for social justice, as it is described by those on the streets, gives us plenty of food for thought. In Israel, and pretty much everywhere else, it is the luxury residential tower projects that make it into the newspapers. Looking to attract those who are in the market for high-end properties, developers often tend to overlook a less glitzy, but nevertheless promising end of the market. With or without the support of the government it is worth taking a closer look at what the market could offer. In the Moscow area, another market that seems to be out of reach for a lot of future property owners, the cheapest offers for flats in new, low-rise residential buildings start at around EUR 1,000. Developers, including major market players, are now turning their attention to the economy class market. With work on an increasing number of such projects kicking off in the suburbs of Moscow, over the next three years the prices in new, low-rise projects are expected to start at EUR 750 per sqm. Meanwhile, in Poland the Family's own home' ('Rodzina na swoim') scheme, a government-subsidised programme aimed at first-time property owners, is coming to an end. The scheme started in 2006, since when over 112,000 cheaper loans have been taken out. Now, with the government looking to avoid a budget deficit, more restrictions have been introduced, reducing the number of those eligible for this special credit. From the beginning of 2013, singles, young families or single parents will be on their own, but the government hopes that by this time residential prices will have dropped. While this may be arguable - bordering on wishful-thinking - we can only hope to see more new home owners soon. I am not going to stick my neck out and predict that protests like those in Israel could also one day take place in Poland, but watching the news and drawing the relevant conclusions cannot hurt.

Mladen Petrov