New Bank of Israel figures indicate that the cooling of the housing market is continuing. Today's report follows last month's circular by Supervisor of Banks Rony Hizkiyahu to the banks instructing them to increase their provisions for mortgages for loans that amount to more than 60% of a property's value, which caused a market storm.
The Bank of Israel reports that 24% fewer homes were sold in April 2010 than in March, and that the largest drop was in new home sales. New home sales in April were nevertheless 8.4% higher than in April 2009. However, April 2009 was characterized by low sales, in the shadow of the global economic crisis. Home sales in April were 6% lower than in April 2008.
Preliminary figures for May, indicate a further decline in new home sales. Sales were down compared with both April, and were 30% lower than in May 2009. However, second-hand apartment sales rose sharply compared with April, and were up slightly compared with May 2009.
The Bank of Israel attributes the contrast of the sharp drop in new home sales in April-May with the rise in second-hand home sales, compared with the corresponding period of last year, to the relatively high prices for new homes, which are driving buyers to seek cheaper second-hand apartments. This change was made possible to a drop in purchases of homes for investment purposes.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2010
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