The downtrend in the real estate sector is continuing. The Ministry of Finance chief economist today published his weekly review of the residential real estate sector for March. The review states that the number of deals continues to fall, mainly in a yearly comparison and the proportion of investors, particularly in the Sharon district. At the same time, there was a slight drop in housing purchases by both those buying their first home and those buying better housing. In addition, for the first time since October, the number of deals for secondhand housing fell, as well as for new homes.
The Ministry of Finance chief economist referred to the state of the real estate market as stagnation, not a slowdown in sales. The Ministry of Finance added, "Initial data for April show a further steep drop in the number of deals, some of which is attributable to the Passover holiday. Housing purchases by investors fell even more steeply."
According to the chief economist's figures, 8,800 housing units were sold in March, the same as in the preceding month and 18% less than the corresponding month last year. The Ministry of Finance attributes the fall to the spread of the downtrend to the secondhand market: "An analysis of the findings shows that the accelerated downtrend can be explained by the fact that in addition to the continued downtrend in sales of new housing units, purchases of secondhand housing also fell significantly for the first time since October."
The March figures indicate that 2,200 new housing units were sold (1,900 excluding buyer fixed price deals), 46% fewer than in March 2016. At the same time, it should be noted that in comparison with the preceding month (February), the number of new housing deals actually increased, mainly in the Tel Aviv and Hadera areas. Nevertheless, the Ministry of Finance stresses, "Even in these two districts, the number of deals in March was significantly lower (by 20-30%) in comparison with March 2016."
Investors bought 1,500 housing units in March, the same as in the preceding month, but 44% fewer than in March 2016. "The proportion of deals by investors was 17%," the review stated, "while the proportion of purchases by investors in March last year was a quarter of all deals in the market." At the same time, in this case also, the comparison with the preceding month (February) shows an increase, albeit an insignificant one, in the proportion of deals by investors - 0.5%.
The Ministry of Finance said in explanation, "This slight rise is attributable mainly to a 0.3% increase in the proportion of investors in the Jerusalem district, although the proportion of homes purchased by investors was also unchanged there. The explanation lies in the steep fall in purchases by young couples in Jerusalem, which pushed up the weight of investors in the district."
The Ministry of Finance said that the most substantial fall in purchases by investors was in Netanya and the Hasharon district, with only 112 housing units purchased for investment, 24% fewer than in the preceding month and 60% fewer than in March 2016.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 28, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017