The Ministry of Finance today published its real estate review for the second quarter, showing that 24,000 homes were purchased, 15% fewer than in the corresponding period last year and 12% fewer than in the first quarter.
The Ministry of Finance wrote that if sales in the buyer fixed price framework are excluded, sales reached their lowest point since the waiting period in 2014 for the 0% VAT plan proposed by former Minister of Finance Yair Lapid. "In the Jerusalem and Tel Aviv regions, sales are nearing an all-time low," the report stated.
The review further shows that investors purchased only 4,000 housing units in the second quarter, one of the lowest figures for this segment since at least the beginning of the century. The proportion of deals by investors hit a low of 17%.
The steep decline in purchases by investors in the second quarter is also reflected in taxes on housing purchases for investment, which amounted to only NIS 450 million, 37% less than in the corresponding quarter in 2016. This is one of the lowest figures in recent years, despite the tax hike.
Sales of housing units by investors fell 9% in the second quarter, compared with the second quarter of 2016. This decline is concentrated in areas where housing prices are high in comparison with both other areas and with the housing units sold by people buying better housing (the Tel Aviv, Netanya, and Jerusalem regions).
The stock of housing held by investors continued to shrink in the second quarter, and has cumulatively decreased by 7,000 housing units in the past five quarters, following a rise of 10,000 housing units in the five quarters before that.
Excluding the buyer fixed price plan, housing purchases by young couples slid 12% in comparison with both the preceding quarter and the corresponding quarter last year. The drop in purchases extended to all regions, except for those with little or no supply of discounted homes. Housing purchases by young couples at the market price were stronger in the lower income brackets.
Housing purchases by overseas residents reached a low of only 390 in the second quarter, the lowest level since the first quarter of 2003 during the second intifada. The steep fall in purchases by this segment extended to all regions other than Netanya. The sharp downturn in sales of new housing units continued in the second quarter of 2017, especially sales at the market price.
The downtrend in the proportion of deals accounted for by the 10 largest contractors continued, hinting that the contractors were being less flexible about prices.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 23, 2017
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