New home sales hit 15-month high

New apartments

Demand for new homes in August-October was 4.7% more than in May-July.

Figures published today by the Central Bureau of Statistics show that 2,037 new housing units were sold in Israel in October, the most since July 2017. The seasonally adjusted figure for October was still the highest since August 2017. The large number of new homes sold is consistent with the rising trend in new home sales since March, with an average monthly increase of 1.9%, after sales of new homes reached a low point.

The increase in sales can be attributed to a feeling in the market that the price increases have come to an end. Contractors who were sitting on the fence waiting to see which way the market will go are now willing to sell, even if they have to compromise on the price. It is important to note that the figures are for the period before the Bank of Israel's Monetary Committee raised the interest rate, a decision that is likely to strengthen the trend, especially because it hints at further hikes in the coming months.

The Central Bureau of Statistics reported that demand for new homes (new homes sold plus homes not for sale on which construction has already begun) totaled 10,360 in August-October 2018, 4.7% more than in the May-July 2018. The seasonally adjusted increase in this period was 7.9%.

The demand for new homes is composed of 51% new homes sold to the general public and 49% not for sale on which construction has begun. Homes not for sales are for the developer's own use, homes ordered by buyers' groups, rental apartments, etc. 5,310 new homes were sold in August-October 2018, down 7.3%, compared with the number sold in May-July 2018, but the seasonally adjusted figure for August-October show a 3.8% increase in comparison with the preceding period.

In a division into geographic districts, 28.5% of the demand for new homes in August-October 2018 was in the central district, 26.1% in the Tel Aviv district, 12.9% in the north district, 10.7% in the southern district, 10.4% in the Haifa district, and 7.1% in the Jerusalem district. Sold homes accounted for 70.5% of the demand for new homes in the central district, 60% in the Haifa district, 57% in the Jerusalem district, 47.5% in the southern district, 41.2% in the Tel Aviv district, and only 28% in the northern district.

Published by Globes, Israel business news - en.globes.co.il - on December 13, 2018

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

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