A week after the Ministry of Housing and Construction released figures on average home prices in Israel showing a substantial falls of up to 6%, figures released yesterday evening by the Central Bureau of Statistics alongside the Consumer Price Index indicate that such price falls are a long way off.
According to the Central Bureau of Statistics Prices of Dwellings Index for September, home prices fell by only 0.1% in comparison with August. Even this tiny fall may turn out to be illusory, as the figures released yesterday are only preliminary and will be updated in due course. A price drop of 0.4% in the previous housing index reading disappeared when the revised figures were released with the current reading, and turned into a 0.1% rise.
At the same time, the third quarter figures released by the Central Bureau of Statistics yesterday, relating to average home prices, indicate a larger fall of some 3%. Here too, however, it is important to realize that this is a national average, and a closer look at the differences between different regions and types of dwellings reveals a similar picture to what we say in the Ministry of Housing and Construction figures last week. While the average may indicate a decline, the regional figures indicate, more than anything, a mixed trend in which there were some substantial rises in the quarter covered.
In the Jerusalem, Tel Aviv, Sharon and central districts, there was a fall in average home prices, but in all other districts there were rises, some of them substantial. The largest rise was in the krayot, suburbs of Haifa, (11.6%), followed by the southern district (5.7%), the northern district (5.3%), Haifa district (1.3%) and Gush Dan (0.6%).
Even in those districts that registered price falls, drilling down to the types of homes reveals substantial differentials. In Tel Aviv, for example, while 3 to 5-room apartments showed price falls of between 3.2% and 9.6%, the average price of small apartments with 1.5 or 2 rooms actually rose by 7.8%.
The picture that emerges from the Central Bureau of Statistics figures, as from those of the Ministry of Housing and Construction, is mostly of a change in preferences on the part of home buyers, who are choosing cheaper homes in the periphery over large and expensive apartments in the center of the country.
It should also be recalled that the third quarter of the year is characterized by low transaction volumes because of the incidence of the Jewish holidays, and that purchase tax for buyers for investment rose at the end of June, causing buyers to bring forward deals to just before the start of the third quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2015
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