Shikun u'Binui Holdings Ltd. (TASE: SKBN), controlled by Shari Arison, today reported that it sold 830 apartments in 2011, 27% fewer than the 1,142 apartments sold in 2010. The report by Israel's largest residential contractor suggests that 2011 was a year with sharply reduced home sales by developers.
Shikun u'Binui is currently building 2,500 apartments nationwide, and is considered a barometer for the residential real estate market climate. Since government agencies have not yet published figures for the housing market for 2011, Shikun u'Binui's report provides an indication about three market trends: a sharp drop in the number of sales; falling income; and housing demand in the periphery, apparently driven by high prices in the center of the country.
Shikun u'Binui reports that the average apartment price fell by 3%, or NIS 50,000 in 2011. The company sold 830 apartments for NIS 1.3 billion - an average of NIS 1.56 million per apartment, compared with the sale of 1,142 apartments for NIS 1.84 billion at an average of NIS 1.61 billion in 2010. Sales in 2011 were especially strong in Zichron Yaakov, Pardess Hannah-Karkur, and Talme Menashe, all towns on the outer edge of the Tel Aviv metropolitan area.
Shikun u'Binui CEO Tamir Dagan said, "2011 was characterized by economic measures that affected the real estate market. Nonetheless, we saw lively demand for reasonably priced new homes in emerging markets, and we hope that demand for these apartments will continue in the coming year. We will continue to market projects in the periphery in 2012, and we intend to maintain our level of 1,000 housing starts a year."
Dagan said that Shikun u'Binui would begin new projects in Yokne'am, Rosh Ha'Ayin, and Beer Yaakov in 2012, and would continue building its projects in Netanya, Kiryat Ono, Rehovot, Kfar Saba, and Jerusalem. "We expect to be active at 15-20 building sites at any given moment," he said, "adding, "We will continue to buy land in demand areas."
Shikun u'Binui's share price fell 1.2% by early afternoon on the TASE today to NIS 6.47, giving a market cap of NIS 2.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2012
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