Housing prices down 1% in September

Apartments in Beersheva
Apartments in Beersheva

Housing prices fell by a full percentage point for the first time since November 2007.

The Central Bureau of Statistics housing prices index fell by a full percentage point in September 2014, for the first time since November 2007. The upcoming indices will show whether the decrease indicates a real downtrend or a temporary statistical quirk.

The housing prices index, which is published separately from the Consumer Price Index, is based on sales of new and secondhand apartments in dozens of communities all over Israel. At the same time, because it is based among other things on transactions reported to the Israel Tax Authority, it is also updated after it is published, and it therefore may be premature to conclude that prices are beginning to slide. Housing sector sources said that although only one month was involved, a 1% drop should not be dismissed, especially given the fact that no such decrease has occurred for seven years.

Others in the industry are skeptical about the possibility that September's figure might indicate the start of a trend. "I see no downtrend in apartment prices. A 1% fall in a single month shows a technical change - a marginal decline caused by developers' bargains offered immediately following the war and the during the High Holy Days period, not a trend," land appraiser Haim Mesilati sai,. "Furthermore, in recent months, some developers have begun marketing new projects. These projects were suspended after March; now that the market is recovering, developers are putting them on the market at presale prices. Unfortunately, today's market conditions make it impossible for apartment prices to fall, other than in a few specific areas. In the secondhand market, it is possible that during the time spent waiting for 0% VAT, apartment sellers felt the pressure, and preferred being flexible about the price in order to sell their apartment before the new law takes effect."

Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Apartments in Beersheva
Apartments in Beersheva
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