The number of housing transactions at market prices (that is, excluding transactions under the government's "Buyer Price" program) was 13% lower in 2017 than in 2016. The figures are contained in the monthly survey of the residential housing market by the chief economist at the Ministry of Finance, released today. The 2017 figure is the lowest since 2011, when Israel was hit by a wave of social protests. The survey relates to November 2017, and the annual figures are based on partial data for December "indicating a continued trend of a standstill in the market," the survey states.
Although the Ministry of Finance insists on regularly using the term "standstill" to describe transaction numbers, that November figures do not indicate a standstill or even a slowdown, but rather substantial growth in the number of transactions that month. The total number of transactions in November was 9,000, of which 550 were for reduced-price units under the Buyer Price program, whereas in the previous month there were just 6,200 transactions, 500 of which were under the Buyer Price program.
The Sukkot holiday fell in October in 2017, which meant that there were fewer business days that month, but the rise in the number of transactions in November is nevertheless considerable, amounting to 45% (including Buyer Price transactions, but since the number of these was similar in the two months in question, the overall percentage fairly reflects the change in open market transactions). The Ministry of Finance chose not to comment on the rise in relation to the previous month, and its survey only compares November 2017 with November 2016 and the first eleven months of 2017 with the corresponding period in the previous year. "In November, 9,000 homes were purchased, of which 550 were in the framework of the Buyer Price program," the survey states. "In comparison with the previous November, the number of market price transactions fell by 9%. Cumulatively, in the period January to November last year the number of transactions fell by 12% in comparison with the corresponding period of the previous year."
In sum, the Ministry of Finance chief economist's figures indicate a significant cooling off of the market during 2017. The November figures, however, which indicate a rise, raise doubts about the continuation of the trend. It is hard to determine the market's direction on the basis of these figures, particularly when September and October were full of Jewish holidays, which impact the figures for all three months. The December figures, when they are published, will give an indication of whether the holidays really affected the market in November, or whether it was matter of buyers getting down from the fence.
Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2018
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