"The stagnation in the real estate market has worsened," the Ministry of Finance chief economist wrote in his weekly review published today. He was referring to the figures published for April-May 2017.
According to the chief economist's figures, only 6,500 housing units were purchased in April, 27% fewer than in the April 2016. 8,500 housing units were purchased in May, down 7%, compared with the corresponding month last year.
The low number of deal in April was affected by the Passover holiday. The review stated, "Other than the months in which the High Holy Days or Passover fell, the level of deals in May was the lowest since August 2014, when the low figure resulted from people waiting for the 0% VAT plan."
The figures also indicate that during April-May, the reviewed period, sales of new housing units by contractors fell 38%, compared with the corresponding period in 2016. The monthly average of sales of new housing units by contractors was 1,500, excluding sales of discount apartments to eligible parties in the framework of the buyer fixed price plan. The Ministry of Finance also wrote that when discounted apartments were included in the figures for sales by contractors, the monthly average for this period was still low at 2,000 housing units.
At the same time, the Ministry of Finance's measures and the wait for a Supreme Court ruling on the law for taxing a third housing unit are still having an effect on deals involving investors.
Investors purchased 1,100 housing units in April, down 40%, compared with April 2016, and 1,300 housing units in May, 30% fewer than the number purchased in May 2016. According to the review, the number housing units purchased in April was one of the lowest figures ever for purchases by investors.
Published by Globes [online], Israel Business News - www.globes-online.com - on July 9, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017