Buyer Fixed Price Plan deals produced the largest number of Israeli real estate deals during the Jewish holiday season in the past decade. As of now, the real estate market is 10% larger than in the first ten months of 2018 and 9% larger than in the corresponding period in 2017, according to a survey of the residential real estate sector in the first ten months of 2019 by the Ministry of Finance being published now. The most prominent feature is the almost complete dominance in the market of young couples, who accounted for 56% of all home purchases.
15,900 homes were purchased in September-October 2019, 18% more than in the corresponding two months in 2018, and the highest number in this period since 2007. The cause was the purchase of 3,300 homes in the Buyer Fixed Price Plan framework in these two months. If these deals are excluded, the increase in September is only 4%.
The number of new homes purchased in 2019 rose significantly, also as a result of the Buyer Fixed Price Plan, but also because of increased sales on the open market. 3,800 homes were sold in September alone, 2,030 of them through the Buyer Fixed Price Plan, the highest monthly total since June 2015. The potential cash flow from new home sales in September-October calculated by the Ministry of Finance chief economist was NIS 5.2 billion, the highest since mid-2015, which confirms the good results reported by the real estate companies listed on the Tel Aviv Stock Exchange.
Young couples bought 8,900 homes, 56% of the total purchased, a record proportion that demonstrates the Buyer Fixed Price Plan's great effect on the housing market. 5,500 of these homes were purchased on the open market, showing that despite the increase in Buyer Fixed Price Plan deals, most young couples are still doing business on the open market.
Investors are still mainly selling homes: they sold 2,600 homes and bought 1,800 homes in September-October. The inventory of rental homes has shrunk by 21,000 since April 2016, but this has not necessarily been reflected in higher rents, because many of the sales by investors are in areas with a surplus supply, such as the outlying areas.
On the other hand, the 700 homes purchased by investors in October was the fewest in the past decade. If we take into account that most of the Jewish holidays fell during this month, the number is still low enough to show a lack of motivation among investors for operating in the market, and that they are waiting for a change in government in the hope that the next government will ease the taxes imposed on them in 2015 by Minister of Finance Moshe Kahlon.
Published by Globes, Israel business news - en.globes.co.il - on December 24, 2019
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