Hundreds of new housing units have been approved for the Malha neighborhood in Jerusalem, near Gilo. The new project will be built in the western and southern parts of the neighborhood.

An Interior Ministry committee tendered its approval to the construction of the new units on Monday.

Last month the Cabinet approved the housing section of the Trajtenberg Commission Report which included steps to increase the supply of residential units while housing reducing prices.

Under the recommendations, approximately 187,000 new apartments are to be marketed throughout the country over the next five years, with 60 percent slated for high-demand areas around Jerusalem and Tel Aviv.

The Malha neighborhood project is slated to provide only 400 new units, however.

The capital was sharply affected by the spike in housing prices between 2008 and 2011. Nevertheless, demand for housing in the city has continued to remain high.

The price of new apartments dropped two percent this past January compared to December 2011. They were 11 percent lower than the peak price of new apartments in June 2011. (IsraelNationalNews © 2012 04/02/12)