The six-monthly survey by Azimuth Advertising and "Globes" carried out in January 2016 indicates a distinct rise in home buying intentions, and a further small rise in the price that Israelis are prepared to pay for a home.
At the same time, after a long period in which small apartments were dominant in buyers' intentions, the current survey indicates a low in the number of people looking for two-room apartments. The decline may be a result of the rise in purchase tax on people buying investment homes and the consequent fall in demand for such homes, since small apartments in the center of the country were preferred by this kind of buyer.
The survey covers the second half of 2015, and shows a 45% rise in the proportion of Israelis looking to buy a home. According to the survey, 10.5% of people are currently considering buying a home, and 8.2% declared that they were actively looking for one. This represents a substantial rise in comparison with the previous survey, in which 7.2% of respondents said they were considering buying a home and only 3.6% said they were actively looking.
The survey also indicates a 1.4% rise in the notional amount that Israeli buyers are prepared to pay for a home, from NIS 1.29 million in the previous survey to NIS 1.31 million in the current one. In comparison with the survey carried out at the end of 2014, the notional price has risen 7.4%. It is still, however, lower than the price people said they were prepared to pay in the surveys carried out in 2013 and in the first half of 2014. The trend indicates that the rise in the notional price is moderating, and the next survey may well show a fall. One factor in the trend may be the tenders being closed in the "Buyer Price" program intended to bring down the cost of housing.
Respondents were also asked the maximum they would invest in a home. The proportion that said they would be prepared to invest up to NIS 1 million rose from 30% in the previous survey to 37% in the current one. In the NIS 1 million to NIS 1.5 million band the proportion was stable at 45%; in the NIS 1.5 million to NIS 2 million band it fell from 11% to 9%; and in the over NIS 2 million band it fell from 13% to 8%.
As far as size of home is concerned, the proportion looking for two-room apartments fell from 9% in the previous survey to just 2% in the current one. As mentioned, this could be because of action by the government to discourage buying homes for investment. The proportion looking for three-room homes rose from 28% to 37%, and the proportion looking for four-room homes rose from just 23% in the mid-2015 survey to 43% in the current survey.
"The market has matured, the public realizes that government promises are not being kept, and prices continue to rise," says Benny Keret, CEO of Azimuth and a strategic consultant to real estate developers. "The 'Buyer Price' reform is aimed at a specific section of the public and so we are seeing a moderate rise of 1.5% in the notional price the public is willing to pay. In my view, the confusion in the market and the government's constant interference in the real estate market will lead to further price rises in the short term," Keret adds.
The 19th Globes-Azimuth Advertising survey since 2006 was carried out through research institute TAK in December 2015. It encompassed 600 people, half of them men and half women, constituting a representative sample of the adult, Hebrew-speaking population in Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2016
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