"In the third quarter of 2014, the price of the average Israeli home reached NIS 1.637 million (0.4% lower in real terms) than at the end of the preceding quarter but 3% higher than at the end of the corresponding quarter of 2013. However, it is difficult to draw conclusions by comparing these quarters due to the influence of Operation Protective Edge and economic activities because of potential buyers expectations over government plans such as the target price and 0% VAT, which was meanwhile cancelled," the Ministry of Construction and Housing reports.
The Ministry of Construction and Housing explained the rise in the average home price as follows, "A fall in the share of deals for new homes costing up to NIS 1.6 million by 5.7% compared to the corresponding quarter in 2013 because the market was on hold for government actions; a fall in the share of deals by first-time homebuyers (from 34.9% to 28.3%) compared with a rise by those buying bigger homes (40.5% to 43%) and those buying a home for investment (20% to 23%); a rise in deals in the Tel Aviv district from 13% to 19% in terms of new homes, and a fall in such deals in the southern region from 17% to 14.7%."
The Ministry of Housing and Construction found that the price of an average new home in Jerusalem rose 9.7% at the end of the third quarter of 2014 compared with the preceding quarter to NIS 2 million. However, over the same period the price of an average new home in Tel Aviv fell 9.3%. Compared to the corresponding quarter of 2013, prices of new homes rose 2.1% in Jerusalem and fell 5% in Tel Aviv.
The same contrast was seen in the prices of second hand homes, which rose 4% in Jerusalem from the preceding quarter and 9.3% from the corresponding quarter, while prices fell 7.4% from the preceding quarter in Tel Aviv but rose by 1% from the corresponding quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2015
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