The Ministry of Finance today reported in its "Red Lights" survey that the median price of new homes fell 1.4% in May, compared with April. This is the sharpest monthly drop since the beginning of 2010, when the decline began. However, the average apartment rose by 5.8% in May. Both the median and average home price was just over NIS 1.09 million in May.
The median home price in May was 10.1% higher than in May 2009, despite the monthly dip, and the average home price was 27.4% higher.
9,210 apartments were bought in May, 35% more than in April, although the number of deals is still less than in May 2009, and reversing the 24% drop in deal in April, compared with March. There were 8% fewer deals in the Tel Aviv and Central districts.
The Ministry of Finance added, "In certain areas, where foreign investors usually account for a large proportion of purchases of apartments for more than NIS 2 million, there has been a sharp drop in purchases by foreign residents, especially in Tel Aviv."
The Ministry of Finance said, "Analysis of the findings shows that, in May, there was a decline in the rate of apartment sales by investors in most districts, except for Tel Aviv and Beersheva, after a near-continuous rise since September 2009. This meant that there was an increase in the supply of apartments in recent months as investors leave the market, which stopped in May."
The ministry cautioned, "If there is no new rise in the rate of apartment sales by investors, this will reduce the supply of apartments available for sale."
Published by Globes [online], Israel business news - www.globes-online.com - on June 29, 2010
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