Home sales continue to fall in Q3

New housing construction  photo: Shutterstock/ASAP Creative

21,700 housing units were sold in the third quarter of 2018, the fewest since the fourth quarter of 2011.

Real estate market figures show that the downtrend in real estate deals is continuing. The Ministry of Finance chief economist today reported that 21,700 homes were sold in the third quarter of 2018, including purchases in the framework of the Buyer Fixed Price Plan, the fewest number of deals since the fourth quarter of 2011 during the social protest. The number was 8% fewer than in the corresponding quarter last year and 5% fewer than in the preceding quarter. The Ministry of Finance announcement stated that if Buyer Fixed Price Plan sales are excluded, the number of deals was 13% fewer than in the third quarter of 2017.

The number of deals at market prices (excluding Buyer Fixed Price Plan sales) in the first nine months of 2018 totaled 65,000, the lowest figure for this period of the year since 2006, the chief economist units said. The unit added, "Since the fourth quarter of 2016, the number of deals has dropped continuously in comparison with the corresponding quarter in the preceding year… This is the longest continuous decrease since the beginning of the preceding decade."

The Ministry of Finance's review also stated that the Tel Aviv district "continues to stand out with a sharp downturn in the number of deals. In the first nine months of the year, the number of deals in this district was only 5,000, a historic low (at least since the beginning of the preceding decade) for this district.

"This finding was especially prominent, in view of the fact that this is the only district in which apartments have not been marketed up until now under the Buyer Fixed Price Plan."

What about move-up buyers? According to the report, purchases by move-up buyers totaled 7,700 housing units in the third quarter, down 12%, compared with the third quarter of last year. "This is one of the lowest quarterly number for purchases by move-up buyers in recent years," the review says. "In the first nine months of 2018, move-up buyers bought only 26,200 homes, 9% fewer than in the corresponding period last year and the lowest number since 2012."

The figures published today confirm many recent reports that housing investors were keeping a low profile, to say the least. The review states, "The third quarter features a new low in purchases by investors… for the first time since at least the beginning of the preceding decade, these purchases fell below 3,000 deals… The proportion of investments in total deals continued to fall, reaching a low of 13%... In comparison with the corresponding quarter last year, purchases by investors were down 35%, following the drastic fall in these proportions since the fourth quarter of 2016. This is the longest continuous drop in purchases by investors since at least the beginning of the preceding decade." The review found that the proportion of banking system employees among investors had decline, while the proportion of investors employed in local government rose.

The figures for sales under the Buyer Fixed Price Plan show a rise in the number of deals. The review states, "Housing units purchased under the Buyer Fixed Price Plan and the Target Price Plan totaled 2,200 in the third quarter of 2018, 60% more than in the third quarter of 2017 and 28% more than in the preceding quarter. Sales since the beginning of the year in the subsidized programs totaled 6,400, 85% more than in the corresponding period in the preceding year."

Published by Globes, Israel business news - en.globes.co.il - on December 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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New housing construction  photo: Shutterstock/ASAP Creative
New housing construction photo: Shutterstock/ASAP Creative
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