Figures published last week by the Ministry of the Economy showed a 33% drop in purchases of secondhand housing units during the third quarter (July-September). According to the figures, 16,900 secondhand housing units were sold in the third quarter, the first time the number has been less than 17,000 deals since the fourth quarter of 2011. At the same time, earlier figures published by the government appraiser and the Ministry of Finance indicate that the decline in the number of deals in the third quarter did not cause a fall in prices.
The Homeless housing price index for November shows a similar picture. The volume of deals was down, but prices did not change direction. Furthermore, there has not been such a clear upward trend in the average price in a long time: only increases in the prices of three-room apartments, a drop in prices of four-room apartments only in one district (Akko-Nahariya), and a fall in prices of five-room apartments in two districts (Haifa and the surrounding area and the Holon-Bat Yam district). In Tel Aviv, for example, prices of three-room and five-room apartments rose 0.4%, while prices of four-room apartments jumped almost 1%.
Another location with noticeable price increases is the Ashkelon-Ashdod area, where per housing unit prices were up 1-2%. The Ministry of Finance still hopes that the low demand will push prices downward. The investors, who last July began to pay purchase tax of at least 8%, instead of 5%, have already thinned out significantly (the number plummeted 70% in the third quarter to a 13-year low). It is expected that many people who do not own apartments will prefer to wait for lotteries for the purchase of housing units at subsidized prices (in the buyer fixed plan tenders, which guarantee a subsidy of at least NIS 200,000 on new housing units). In addition, the Ministry of Finance figures show that many of those buying better housing in place of their existing homes prefer to wait now; the number of purchases fell 18%, but failed to affect prices.
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2015
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