Has the slowdown in the real estate sector and the lack of available land for construction affected the housing start figures? According to Central Bureau of Statistics figures published today, it appears that this is the case. The figures show that construction of 12,188 housing units began in the first quarter of this year, 10% fewer than the 13,564 housing starts in the fourth quarter of 2016 and 8% fewer than the 13,243 housing starts in the corresponding quarter last year.
The number of housing starts in the first quarter was the fewest since the 11,658 housing starts in the fourth quarter of 2014. There are two main reasons for the decline in housing starts. The first is the lack of available land for construction caused by the marketing of state land exclusively for the buyer fixed price plan. At the same time, deals for privately owned land have become much more expensive, and combination deals are now much more complicated. As a result, there have been fewer land deals over the past year, which has reduced the number of plots on which construction can begin.
At the same time, the real estate sector warned that building starts in the first quarter would show a decrease due to the slowdown in the market, which is making contractors and developers delay projects, because they fear it will be difficult to sell them later.
It is important to keep in mind that the Central Bureau of Statistics' figures for housing starts, like the other housing figures, are subject to later revision. Also according to today's Central Bureau of Statistics figures, the pace of housing completions (housing units on which construction was completed) remained high in the first quarter, totaling 11,546. Figures for housing units under active construction were also high, amounting to 113,800 in the first quarter, compared with 113,100 in the preceding quarter and 98,700 in the corresponding quarter last year.
When divided into regions, the most significant drop in housing starts was in the central region, where housing starts totaled 2,387 in the first quarter, compared with 3,337 in the fourth quarter of 2016. The number of housing starts also fell in Jerusalem, the north, and Haifa, but rose in Tel Aviv and the southern district.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 19, 2017
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