The Israeli cabinet under Prime Minister Benjamin Netanyahu on Sunday approved a plan aimed at reducing the costs of housing.

The plan is one of the four sections of a report by the Trajtenberg committee, which was named after its chairman Prof. Manuel Trajtenberg and commissioned after last summer's mass protests in Israel against spiraling costs of living. One of the central issues was the problem of finding affordable housing, one that the government aims to address by increasing the supply of apartments.

According to the decision, the Israel Lands Authority will market 187,000 new apartments across the country over the next five years. Of these, 60 percent will be located in high-demand areas, such as Jerusalem, Tel Aviv and the central Dan region.

Special efforts will also be made to increase housing construction in minority-populated areas, including Arab-Israelis, the Druze, and Circassians.

"I don't think that this particular decision is going to make a big difference," Professor Elia Werczberger of the Tel Aviv University told Xinhua on Monday.

"But in the past month there has been some indication that the housing bubble is slowly getting slower and there has been some decline in housing prices," he added.

Professor Shlomo Mizrahi of the Ben-Gurion University of the Negev said that while he believed that the new plan could lead to lower living outlays, he cautioned that "the variables that influence these costs are very complex and it's very hard to predict to what extent it will have an influence."

In addition to trying to improve the housing situation, the Trajtenberg committee, which was set up last September, also dealt with tax exemptions, social services such as preschool education, and the concentration of the Israeli economy to a limited number of business families.

Werczberger said that while the government was trying to increase supply and get contractors which already have land allocated for construction to speed up construction, he was not sure that it would have a major impact and cautioned that lower housing prices might not only be a positive development.

"In a country where more than 70 percent of the people are homeowners, a real decline in house prices means that there is going to be a real decline in the assets of the general population, " Werczberger said.

One problem that the government intends to deal with in the new initiative is to force construction firms to build on unused land that they own, with the assumption being that they prefer to wait until it is more economically favorable for them to build.

By imposing a fine of up to 10 percent of the home's final selling price on the contractor for stalling the construction process, the government hopes to speed up the process.

Werczberger was skeptical as to whether this initiative would actually work, because it does not address the issue of high land prices, especially in the more attractive areas of the country.

On the other hand, Mizrahi said that while the land prices are part of the reason, there are other more important factors.

"The land costs can be reduced, but I think that this is only a very small part of the picture. Much more important are the builders themselves; the construction entrepreneurs have created a very strong lobby in favor of certain regulations and therefore I don't think that the land prices are the whole picture," Mizrahi said.

One problem particularly felt in Jerusalem and Tel Aviv is the influx of foreigners who buy apartments either as an investment or as a vacation home, hence leaving the apartments empty most of the year.

Especially in Jerusalem, this has led to some exclusive neighborhoods becoming ghost towns; in Tel Aviv the upscale apartments tend to be in high-rises so the effect is less noticeable.

By raising the municipal taxes paid by homeowners, the government hopes that some of the foreign owners would start to rent out their apartments to compensate for the tax increase.

Mizrahi said that while the long-term influence of the new government initiatives are very hard to predict, one of the most important things is the fact that there are changes.

"I believe the fact that the government does something also influences that atmosphere, so to a certain extent we will see a reduction in the costs," he said.

The new atmosphere is having a direct effect on housing prices, according to Mizrahi, who noted that people are waiting to see what changes are coming before they sign on the dotted line for a new piece of real estate.