May home sales in Israel reverse trend

Home for sale  image: Shutterstock

Monthly home sales rose for the first time since August 2016.

9,200 homes were bought in Israel in May, 660 of them subsidized homes under the Buyer Price program (under which the state auctions land to contractors on the basis of the lowest price bid for the apartments to be built on it rather than the highest bid for the land). The May total including Buyer Price apartments represents a 10% rise; excluding Buyer Price, the rise is 8%. The figures are from the Ministry of Finance chief economist's monthly survey of the housing market released this morning. The rise in the number of transactions ends a long series of declines in the past two years.

"The continuous decline since August 2016 in the number of transactions has halted," the survey states. According to the survey figures, the increase in the number of deals was mainly in three areas: Jerusalem; Netanya; and Rehovot. The Ministry of Finance attributes the rise in the first two areas to sales by owners of investment properties, and in Rehovot to move-up buyers. It should be stressed that he figures indicate a rise in transaction numbers, not necessarily a rise in prices. The Ministry of Finance estimates that the rise in transactions is actually associated with a price decline.

2,500 new homes were sold in May, 14% more than in May 2017. This is a significant rise, but it includes Buyer Price homes, without which the rise is just 4%. The rise in new home sales was mainly in the central region and in Rehovot, while sales fell in Hadera and Beersheva.

According to the Ministry of Finance, the rise in new home sales results from, among other things, the long slowdown in the market, which has had an effect on contractors. "These findings tend to indicate that at least at some of the big companies the need for cash flow is starting to leave signs in the levels of prices that they set," the survey states.

Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2018

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

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Home for sale  image: Shutterstock
Home for sale image: Shutterstock
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