In the fourth quarter, the average price of a four-room apartment in rose by 0.7% in nominal terms over the preceding quarter in the 16 cities reviewed by the Government Assessor in its quarterly report. The number of transactions also rose. For the year as a whole, the average price of a four-room apartment rose by 4.6% in nominal terms, the same increase as in 2012.
The average price of a four-room apartment in Tel Aviv rose 10% in 2013 to NIS 2.75 million. The average price of a four-room apartment in Herzliya also rose 10% in 2013 to NIS 2.04 million, and the average price of a four-room apartment in Jerusalem rose by just 1% to NIS 1.76 million.
The average price of a four-room apartment fell by 1-2% in the fourth quarter in Kfar Saba, Modiin, Netanya, Rishon LeZion, and Eilat.
The variability in prices for four-room apartments was very high in Tel Aviv, Jerusalem, and Haifa, indicating the difference between neighborhoods and the condition of buildings. Price variability was low in Kfar Saba, Modiin, and Rehovot, apparently because of the homogenous nature of their populations.
Home sales were above the annual average in the fourth quarter of 2013, especially in December. New home sales in December were 30% above the monthly average for the year. The increase was partly due to homebuyers closing deals before Amendment 76 of the Land Tax Law, which lowers tax exemptions on homes, came into effect on January 1, 2014. Lower demand by investors, causing a drop in prices, which was supposed to happen as a result of government policy and land tax measures, did not happen in the fourth quarter.
The public also realized that government measures to greatly boost the housing supply will not have any effect on prices in the short term. The housing inventory was unchanged in 2013, compared with 2012, although the inventory in the fourth quarter was 10% higher than in the preceding quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2014
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