The slowdown in real estate continues: in the fourth quarter of 2011, apartment prices fell 1%, after falling a similar amount in the third quarter of 2011, the quarter in which the housing turnaround took place after prices rose continuously for two and a half years. These statistics were published today by the Ministry of Justice head government assessor, based on the prices of four-room apartments, the most common size home in Israel, in 16 cities. In comparison with the fourth quarter of 2010, housing prices rose 3% in the last quarter.
Government Assessor Tal Alderoti said, "The wave of social protest that arose last summer, along with global economic uncertainty, and the steps taken and statements made by the government and the Bank of Israel, were the most influential factors that led to the current slowdown in residential real estate deals."
The government assessor's statistics show that Tel Aviv and Bat Yam saw the sharpest falls in apartment prices, with a nominal rate of 4%. Tel Aviv remains the most expensive city in the country, with an average price of NIS 2.3 million for a four-room apartment. It is also the only city where a home this size costs on average more than NIS 2 million.
However, it must be noted that most apartments this size in Tel Aviv are relatively new, as Alderoti recently noted in an interview with "Globes". "It is logical that new projects and relatively expensive apartments would be the first ones hit by the slowdown. If I were to sample two-room apartments, results might show that South Tel Aviv is blossoming, since people escaped to cheaper apartments there. The numbers might be completely upside down." Alderoti's comments refer to third quarter 2011 statistics, which show a decline of 6% in Tel Aviv housing prices.
The government assessor's statistics also show that Haifa, Rishon LeZion, and Rehovot all suffered a decline of 2% in nominal terms. Beersheva, Herzliya, Jerusalem, Kfar Sava, and Modiin all showed a decline of 1%.
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2012
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