Jerusalem, Tel Aviv home prices down faster than national average

Jerusalem housing Photo: Rafi Kutz

The average apartment price fall in Israel's two main cities was well over the national 2.3% average in the past 12 months, the Central Bureau of Statistics reports.

The housing prices index finished down 2.3% over the past 12 months, and the big surprise was where the fall was most pronounced. Housing prices did not decrease uniformly in all districts. The drop in Jerusalem - 6.6% - was almost triple the fall in the nationwide average, and the drop in Tel Aviv was double the nationwide average, while housing prices actually rose slightly in Haifa, the Central Bureau of Statistics reports.

While the average housing unit price nationwide fell NIS 35,000, the average price dropped NIS 124,000 in Jerusalem, NIS 113,000 in Tel Aviv, NIS 19,000 in the northern district, and only NIS 3,000 in the southern district. The average housing price in Haifa rose by NIS 1,000.

"The Buyer Fixed Price Plan kept buyers out of the market"

"A fall in prices is distinguishable, but it is minor," says Jerusalem Realtors Association chairperson Assaf Epstein, adding, "There are fewer deals, the shelf time of properties from when they are put up for sale has become longer, and the Buyer Fixed Price Plan has definitely kept potential buyers out of the market."

Epstein says that according to reports from other realtors around Israel, there are still property owners with the same attitude as two years ago who are unwilling to accept the change. "If you look throughout the market in Jerusalem, it's not the same as it was two years ago, and not even 18 months ago. There are fewer deals and a lot of confusion. My colleagues and I try to explain the situation to sellers who are stubborn and are not lowering their prices - that you always have to adjust yourself to the market. At the same time, I don't see any major decline, and I don't hear from my colleagues about a general market slide. That's not what's happening. It's having an effect on the atmosphere, especially for luxury apartments at prices of NIS 3.5 million and more. It's more evident there."

The public is looking for cheap apartments

The message from Tel Aviv and Haifa is the same. Realtors say that many apartment owners have already realized that there is no point in asking unrealistic prices; otherwise, no one will call them. In principle, it is likely that the district price indices are following the rule, "What is more expensive goes down more." Housing prices in Jerusalem and Tel Aviv are the highest (the average apartment price in the fourth quarter of 2018 was NIS 1.88 million in Jerusalem and NIS 2.67 million in Tel Aviv), and the current period is a time of cheap apartments. A person who sell an apartment whose price is higher than the going price in a given place will either have to wait a long time before it is sold or compromise on the price. The central district is steadier, as are districts in which housing prices are much cheaper, such as Haifa and the southern, where changes in prices were minimal. The fall in prices in the northern district is also not unusual, given the fairly intensive building in places like Afula, Karmiel, and Nahariya.

Publication of the Central Bureau of Statistics' nationwide housing index began in late 2017, after Minister of Finance Moshe Kahlon terminated the surveys by the chief government appraiser, and has become the official government tool for housing prices. A year later, it is evident that the index is not an adequate replacement for the government appraiser's surveys, which included prices of four-room apartments in Israel's 16 largest cities. Nevertheless, it is good enough to show that prices behaved differently in different places in Israel.

Published by Globes, Israel business news - en.globes.co.il - on January 16, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Jerusalem housing Photo: Rafi Kutz
Jerusalem housing Photo: Rafi Kutz
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