Home prices fall

Housing Ministry: The average price of a home fell almost 4% in the second quarter to NIS 1.22 million.

After peaking in the first quarter of 2013, home prices fell by 3.8% in real terms in the second quarter, the Ministry of Housing and Construction reported today in a survey of home prices in 110 communities.

The Ministry of Housing says that new home prices fell by 10.5% in real terms in the second quarter, compared with the preceding quarter, and that second hand home prices fell by 1.5%. Compared with the second quarter of 2012, home prices were stable: new home prices rose by 1% in real terms and second hand home prices rose by 2%.

The Ministry of Housing Economic and Data Analysis Department believes that the drop in home prices was partly due to "a market correction to exceptionally high price levels in the first quarter of 2013… It is also possible that the real estate market believes in the 33rd government (which began its term in March 2013), or is at least giving it a chance to prove itself, in the light of the various measures planned in this area."

Prices for new homes were stable in many towns, and the nationwide drop in prices was due to changes in the housing mix. The proportion of small and cheaper apartments in the periphery rose, and the proportion of first-time homebuyers among purchasers increased.

The Ministry of Housing's breakdown of home prices by towns shows a 36% jump in the average home price in Arad in the second quarter, compared with the preceding quarter, to NIS 576,000. The average home price in Nazareth rose 21% to NIS 763,000.

By contrast, the average home price in Tel Aviv fell 5.8% to NIS 2.1 million in the second quarter, and the average home price in Ramat Hasharon fell 12.6% to NIS 2.08 million. The average home price fell by 8.5% in Shoham, by 12.7% in Kiryat Malakhi, and by over 5% in Yavne.

Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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