In the second quarter of 2014, the decline in the number of home purchase transactions that began in the first quarter continued, following the peak level of the last quarter of 2013, according to the survey of the real estate market released today by the Ministry of Finance.
From 32.2 thousand homes bought in the fourth quarter of 2013, the number of transactions fell in the second quarter of 2104 to 22.3 thousand. In comparison with the corresponding quarter of 2013, the number of transactions in the second quarter of this year was 29% lower.
The figure for the second quarter is the lowest since the fourth quarter of 2011, when the social protest in Israel was at its height.
Purchases of new homes fell 24%, while purchases of secondhand homes fell 9% in the second quarter of 2014, to 17 thousand.
The drop in the number of deals for new homes in the second quarter can to some extent be explained by the plan for a 0% VAT rate for first time homebuyers.
Home purchases by young couples fell by 14% in the second quarter in comparison with the first. The proportion of new homes purchased at prices below the threshold for the zero VAT rate fell to 5% of the total. There were especially sharp falls in this price bracket in places where prices are close to the threshold.
The Ministry of Finance points out that the decline in purchases by young couples was mainly in the new homes market: 30% in comparison with the previous quarter. This compares with a decline of 6% in purchases of secondhand homes by young couples.
Purchases for investment fell by 16% in the second quarter. After rising for two quarters, the proportion of investors among homes purchasers fell in the quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on August 21, 2014
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