Yesterday, the Central Bureau of Statistics reported that home prices rose 1.3% in August-September, a figure that disappointed many in the Ministry of Finance and the Israel Land Authority, who have already begun believing that market trends have started changing. Only two days earlier, the Central Bureau of Statistics published figures indicating lower demand. In the first nine months of 2016, demand for new apartments fell 7.5%, compared with the corresponding period last year. During this period, 22,700 new apartments were sold, 8.3% less than the corresponding period. The number of new apartments left for sale at the end of September broke a record: 29,836 new apartments, compared with 25, 624 new apartments in September 2015, 4,200 additional homes remaining on the market.
Contradictory figures
At present, the public is mainly confused about the various contradictory figures. At the same time, a consistent decline in demand and a rising supply must change the familiar formula that contributed to price rises during the last decade. Has the supply of homes significantly grown?
"Globes" found that the number of second hand homes on the market has also considerably increased. We examined Yad2 second-hand sale website figures relating to the number of homes offered for sale in January-September 2016, compared with January-September 2015. Figures indicate that on the national level, in the 90 cities and villages with the highest number of ads, the number of ads posted on the site went up 4%, reflecting the number of homes put for sale. Overall, there were 177,764 homes for sale, 7,000 more than in 2015.
This analysis, carried out by Yad2 for "Globes", reveals that out of 90 cities and villages examined, 60 had a higher number of ads, compared with the corresponding period last year. The most striking change was noted in Ariel, where the number of homes for sale jumped 50%, from 416 ads in 2015 to 622 this year. In Atlit, the number of ads went up 48% percent, from 246 to 365 ads. A striking change was also noted in the new city Harish, currently being built (a change which is also due to projects being completed), with 201 sale ads, compared with 137 last year.
It is still early to call this a home sale trend. On the national level, there was a modest, 4%, increase, with fewer ads in important cities such as Tel Aviv, Beersheva and Givatayim. Yad2 also checked the average time an ad stays on the site and found that the average ad lifetime decreased at a national average of 4 days, to 31 days from 35 days last year, which means that homes were sold more quickly (or that the seller chose to remove the ad for other reasons). As for changes in home prices during the ad's lifecycle, it seems that fewer sellers lowered prices along the way, at least as far as prices posted on the site are concerned.
The Yad2 staff believes that despite the growing number of ads, the fact that homes were sold more quickly indicates that demand has remained firm: "Although the figures indicate a slight increase in the number of ads, it is evident that homes are sold more quickly than they did last year, and sellers are less eager to compromise on price to close a deal, which explains the continuing rise in prices."
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2016
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