Africa Israel Residences (TASE: AFRE) has been hit by the fall in the sale of new apartments. One of the country's largest residential real estate development companies reported that it had sold 119 new homes in the third quarter of 2022 for NIS 335 million, compared with 193 new homes for NIS 587 million in the corresponding quarter of 2021.
This was a fall of 38% in terms of housing units sold and 43% in overall revenue. The average price of an apartment sold in the third quarter of 2022 was NIS 2.8 million, compared with NIS 3 million in the third quarter of 2021. The fall in revenue and prices was influenced by the mix of the homes sold, with Africa Israel Residences last year selling many homes in the exclusive DUO TLV project which it is building in central Tel Aviv.
These figures reflect the national trend shown by the Central Bureau of Statistics, which found that there was a fall of 25% in purchases of new homes in the third quarter of 2022, compared with the second quarter of 2022, and a fall of 40% compared with the corresponding quarter of 2021. 8,380 new apartments were sold in Israel in the third quarter of 2022, taking the market back three years to 2019 levels.
Despite the declining figures, Africa Israel Residences CEO Micha Klein is confident that prices will not fall. "In my opinion, even if we see a halt in the rise in prices or a moderation, there is no way that prices will fall. There is no increase in supply, and in theory supply will decrease due to the inability of developers and contractors to build. We will be there to buy projects and build them, but I don't know how many like us there are in the market."
Published by Globes, Israel business news - en.globes.co.il - on November 15, 2022.
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