8,909 homes were sold in July 2024, up 29% from July 2023, mainly due to special discount offers by building contractors, according to the latest survey of the housing market by the Ministry of Finance chief economist. The survey shows that the recovery in the market is continuing, although it should be noted that July 2023 was the lowest figure for home sales since the early 2000s. The July 2024 figure was 8% higher than June 2024. Subtracting the number of new homes sold in government subsidized programs, 8,126 homes were sold in July 2024.
The survey notes that historically comparing July 2024 to the number of housing deals in July throughout this century, July 2024 was ranked somewhere in the middle.
"This is a higher relative ranking than the one recorded in the previous two months, and this is mainly due to a relatively high level of new apartment sales," the survey stated.
The Beersheva region particularly stood out in the sales of the contractors, with 615 new apartments sold at an average price of NIS 1.7 million. "This is one of the highest levels of contractor sales in this area in the last 24 years, and more than a quarter of the apartments sold are in Netivot," the survey said.
It was also noted that more than half of the apartments in the Beersheva region were purchased by first time buyers. The salary levels for the household of these buyers average NIS 17,600 (gross per month, per household).
Purchases by investors in northern cities declined sharply
Purchases by investors totaled 1,390 apartments, up 36%, from the low level recorded in July last year. Compared with the preceding month, there was a moderate increase of 5%. About 16% of purchases were by investors in July 2024, which is up 0.6% from July 2023.
The leading cities for investor purchases in the first seven months of 2024 were Tel Aviv, Jerusalem and Haifa. Growth rates of 58% and 78% were recorded in Tel Aviv and Jerusalem, respectively, while in Haifa there was a decrease of 7%. In Beit Shemesh, there was a sharp increase of 117% in purchases by investors, while northern cities stand out with sharp declines, in particular Kiryat Shmona and Safed.
The 20/80 promotions by contractors, in which the buyers purchase an apartment 'on paper', paying up to 20% at the time of signing and the balance when the apartment is ready for occupancy, stand out in the cash flow of companies. According to the survey, contractors' potential flow from the sale of new apartments in July was NIS 9.1 billion - 49% higher in real terms, than July last year. But from the analysis of the actual flow, based on VAT reports, it was found that it increased at a relatively moderate rate of 14%. "This reflects, among other things, the financing operations of the contractors," the survey says.
Published by Globes, Israel business news - en.globes.co.il - on September 12, 2024.
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