Home prices rose 2.7% in the second quarter of 2015 as did the number of deals, reports Government Assessor Tal Alderotti today. The average price of a four-room apartment in the 16 cities covered was 2.7% higher in the second quarter than in the preceding quarter, and 5% higher in nominal terms than in the corresponding quarter of 2014.
Alderotti said in the survey that the public still does not expect a fall in home prices in the near future. He explained that most of the public, which had been hanging on for the election results and the forming of the new government's housing policy, have stopped waiting and returned to buying homes. Consequently, there was a sharp rise in the number of homes sold in the second quarter compared with the preceding quarter.
The survey examined patterns in 16 cities and found that prices in the second quarter rose in 14 of the cities but were unchanged in Haifa and Holon. In Tel Aviv and Ashdod prices rose by only 1% while the highest prices rises were in Jerusalem and Netanya (5% each), and Herzliya (6%). Over the past 12 months, prices fell 1% in Ramle and were unchanged in Tel Aviv and Eilat but rose 8% in Jerusalem, 9% in Netanya, and 14% in Beersheva.
The Government Assessor noted that the Minister of Finance Moshe Kahlon had raised purchase tax for investors, this leading to a sharp rise in the number of new apartments sold to beat the introduction of the new tax.
Alderotti said, "The government has taken a number of measures as part of its efforts to reduce home prices, restrain demand, and increase supply. On the subject of restraint of demand actions taken include raising the level of purchase tax on homes for investment. At the same time, the government is preparing measures to increase the overall supply of apartments and cheaper apartments in particular through the fixed price plan. These measures will make apartments available in a range of at least two years so that no solution is on the horizon and it certainly did not impact prices in the second quarter."
Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2015
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