Is the pace of the recovery in Israel’s residential real estate market slackening? Figures from the Central Bureau of Statistics show a decline in home purchases at the end of the summer, but no firm conclusions can be drawn yet, and it may be that developments in the war had an effect.
In August, 7,250 homes were sold, 3% more than in August 2023. 3,940 of the homes were secondhand and 3,310 were new. Sales of new homes rose by more than sales of secondhand homes.
The supply of unsold new homes grew, reaching 69,720 at the end of August, 19% more than at the end of August 2023.
The cities that led new home sale numbers in the June-August period were Jerusalem, Tel Aviv, and Ofakim. Secondhand sales were led by Jerusalem, Haifa, and Beersheva.
Sales of new homes in August this year were 20% lower than in the previous three months. In comparison with the low in August 2023, the number of transactions grew, but still, the decline in August in comparison with the preceding months is a surprise, especially the strength of the decline. In wartime, however, it is reasonable to assume that when the bombardments become more intense (as we are now experiencing, chiefly from Lebanon) the number of deals will fall, and that the more that the public feels that the war is coming to an end, the more the number of deals will rise.
The new and secondhand markets are quite different. From August 2023 until August 2024, the number of new homes sold rose by an average of 4.3% monthly, although there was a slight decline in July-August. As mentioned, it is not yet possible to determine whether this represents a change in the trend.
In secondhand homes, there was an average monthly rise in transaction numbers of 3.1% in the same period.
The gap between the rates of sales in the new and secondhand markets have led to a situation in which 40-50% of all homes sold are new homes, which compares with a historically normal proportion of 20-30%. The assessment on the market is that financial incentives provided by developers and the lack of protected spaces in many of the secondhand homes offered for sale are attracting buyers to the new home market.
Jerusalem leads for both new and secondhand home purchases. In Tel Aviv, people mainly seek new homes; more than 60% of the homes sold in the city are new. In third-placed Haifa, the situation is the reverse of that in Tel Aviv, and the majority of homes sold are secondhand. The situation in Beersheva is similar.
The supply of new homes is at a historical high, with almost 70,000 homes waiting to be sold each month for several months. About 80% of these are in Tel Aviv, 9% in Jerusalem, and 5% each in Bat Yam and Netanya.
Published by Globes, Israel business news - en.globes.co.il - on October 13, 2024.
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