The volume of real estate deals in Israel is still declining, and reached its lowest point since the social protests in 2011. As a result of the dearth of purchases by investors, the volume of deals in the second quarter of 2018 reached the lowest point since the beginning of the decade. The volume of purchases in the Tel Aviv region was the lowest since the days of the intifada and the recession in the first quarter of 2003, according to a survey of the second quarter of the year published by the office of the Ministry of Finance chief economist.
The review also states that according to an examination of the changes in prices in Tel Aviv, based on the Case-Shiller Index (an index that refers to successive deals for the same property over time), it appears that housing prices also fell considerably in the region. According to the review, while prices boomed 3.4-fold in 2000-2016, starting in the first quarter of 2017, the figures show that housing prices in the city have fallen by a cumulative 9%, including 1.1% in the second quarter of 2018.
The survey figures also indicate the possibility of a change in trend among those eligible for the Buyer Fixed Price Plan. A rise in the proportion of non-homeowners who bought homes on the free market, rather than in the framework of the government discounted housing plan, is visible. In the second quarter of 2018, 9,500 homes were purchased at market prices by people making their first purchases of a home, 3% more than in the corresponding quarter last year, following four consecutive quarters of decline.
This increase in purchases is concentrated in the secondhand housing market, not the new housing market, which explains the weakness in sales by contractors, despite the increase in housing purchases on the free market. Purchases of new housing at free market prices totaled 4,800 in the second quarter, down 6%, compared with the second quarter of 2017 and the lowest level since the waiting period for former Minister of Finance Yair Lapid's 0% VAT plan, when sales by contractors dropped precipitously.
1,700 discounted homes in the quarter
21,500 homes were purchased at market prices in the second quarter of the year (not including the Buyer Fixed Price Plan), 6% fewer than in the corresponding quarter in 2017. Discounted apartments sold in the second quarter totaled 1,700, making the total number of homes sold in the quarter 23,200, 12% fewer than in the first quarter of the year.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2018
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