The Homeless apartments in demand price index indicates that prices continued to rise in August for most types of apartments and in most areas.
Prices fell for four-room apartments only in Jerusalem and Petah Tikva, down 2% and 5%, respectively, compared with July. Prices fell for four-room apartments rose in both cities in July, compared with June; up 4% in Jerusalem and 6% in Petah Tikva, suggesting that the drop in August was a small correction in an upward trend.
Prices for five-room apartments fell in three areas of the thirteen areas covered by the Homeless survey in August. The survey did not cover the north because of changes in the index and the need for statistical verification. Prices for five-room apartments fell by 2.3% in Rishon LeZion in August, after falling 1.4% in July; prices fell by 3.5% in Petah Tikva, after rising over 4% in July; and prices fell by 2% in Ness Ziona and Rehovot in August, after remaining unchanged in the previous month.
Prices for three-room apartments, which offer the highest rental return on investment and are the cheapest alternative in the housing market, fell in seven of the thirteen areas covered by the Homeless index. It is possible that the fall in prices was due to investors leaving the market as new investors realize that the profit margins of the past two years will not return in the near term, while longstanding investors have decided that now is the time to sell, as this is the usual time to renew leases. The result is the dumping of apartments on the market, mostly three-room apartments.
Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2010
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