The decline in the volume of housing deals (15% in the second quarter, compared with the corresponding quarter last year) has not yet cooled off prices. The housing prices index of the Gazit-Globe Real Estate Research Institute at the Interdisciplinary Center (IDC) Herzliya, which is based on repeated deals for the same housing units, showed a 1% rise in the second quarter, sources inform "Globes."
At the same time, an analysis of the revised figures for deals indicates that prices were up 1.5% in the first quarter, compared with the original report of a 2.3% increase. Furthermore, the increase in the second quarter is substantially lower than the 2.1% increase in the second quarter of 2016, indicating that the market is currently in a waiting position.
In the bottom line, the Gazit-Globe index was up 2.5% in the first half of the year. According to the Central Bureau of Statistics figures prices rose 1.6% in December 2016-June 2017, with the 0.5% drop in prices reported in February being reversed into a similar increase.
The Gazit-Globe Real Estate Institute says that prices are still rising in all areas of Israel, except for the south, where prices have fallen in recent months. According to the figures, prices were down 1.3% in the south in the first quarter of 2017. There is a plentiful supply of land for marketing and construction in the south.
The Gazit-Globe Real Estate Institute prices index is based on a calculation method similar to that of US firm Case-Shiller, which is designed to exclude as much as possible the effect of the variance between housing units. The index showed a 5.9% rise in 2016, with prices stabilizing in the fourth quarter, when the rise was only 0.5%.
The index is based on 200 repeat deals each month, as reported to the Israel Tax Authority's information system. Gazit-Globe Real Estate Institute CEO Efrat Tolkowsky says, "The market is in the midst of an especially challenging trial. The entire production machinery for housing units in Israel is being systematically diverted. As of now, despite the drop in the volume of deals and Minister of Finance Moshe Kahlon's buyer fixed price plan, it appears that the prices are still stable, and the trend is not reversing, despite the Ministry of Finances' efforts and promises."
Tolkowsky added, "Elsewhere in the world, there are difficulties in buying a housing unit through public and affordable housing projects as parallel but separate markets, while Israel is trying to create a single market of prices."
Published by Globes [online], Israel Business News - www.globes-online.com - on September 5, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017