Housing deals in Israel up in first half of 2019

Buyer Price project in Yavne photo: Eyal Fisher

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Much of the increase in housing purchases in the first half is attributable to the Buyer Fixed Price Plan lotteries, under which 6,900 apartments were sold.

54,000 real estate deals were completed in israel in the first half of 2019, 8% more than in the first half of 2018 and 6% more than in the first half of 2017. Housing units purchased in Buyer Fixed Price Plan lotteries accounted for 13% of the total number of deals, according to a survey of the real estate market in June 2019 by the Ministry of Finance chief economist published today. The review reported that the stock of housing units held by investors had fallen by 16,000 since April 2016.

Much of the increase in housing purchases in the first half is attributable to the Buyer Fixed Price Plan lotteries, under which 6,900 apartments were sold.

The chief economist notes that the increase in the number of deals involving new housing units also extends to the free market as the leading factor in the market. 19,000 new housing units were sold in the first half of the year, 30% more than in the first half of last year and also more than the number sold in the first halves of 2017 and 2016. The chief economist thereby confirmed figures obtained by "Globes" concerning a substantial rise in the demand for new housing under both the Buyer Fixed Price Plan and on the free market. 35% of all of the deals in the first half of 2019 were new housing units - an exceptionally high proportion, given the usual 20-25% proportion of the total market.

The increase in new home sales on the free market in June 2019, compared with June 2018, was steepest in the area of the coastal and inland plan opposite the Judean hills, which includes Rehovot, Ness Ziona, Rishon Lezion, and Modi'in, where 350 new housing units were sold, followed by the central region (330 new homes) and Haifa (240 new homes). 240 new homes were sold in the Sharon region in June, 60% more than in June 2018. This extraordinary increase was accompanied by a large increase in the number of homes purchased on paper, meaning that occupancy of these homes is scheduled for a rather remote date.

Young couples are leading the market, accounting for 52% of all the deals in the first half of the year, in comparison with the usually 40% ratio. The primary is the lower proportion of investors in the housing market as a result of the high taxes imposed by the Ministry of Finance, but the proportion of move-up buyers is also declining.

The survey revealed that some move-up buyers had purchased new homes on paper before selling their old ones, probably because of low sales in the secondhand housing market. This gives them a fairly long time to sell their old homes before being classified as investors owning two homes.