The average price of new and secondhand apartments declined in the third quarter, compared with both the preceding quarter and the corresponding quarter last year, according to Israel Tax Authority data revised by the Ministry of Construction and Housing main finance division. One of the reasons for the decrease in price was the mounting exit from the market of investors, due to the increase in purchase tax in June.
The average price for a new apartment in the third quarter was NIS 1.58 million, 6% less in real terms than in the preceding quarter and 4% less than in the corresponding quarter last year.
The average price for a new four-room apartment was NIS 1.41 million, 5.5% less in real terms than both in the corresponding quarter in 2014 and in the preceding quarter. The average price for a new five-room apartment was NIS 1.77 million, 2.6% less in real terms than in the corresponding quarter last year and 5.7% less in real terms in the in the preceding quarter.
The third quarter featured a drop in the number of apartments purchased in the market, due to seasonal factors, such as the holidays, which fall during this quarter. Nevertheless, the number of deals for new apartments in the third quarter of 2015 was also higher than in the corresponding quarter last year.
The Ministry of Construction and Housing noted that the increase in the purchase tax rate was significant in lowering the price, due to the decline in the proportion of deals for investment in the high price segment. Another factor was a noticeable fall in the proportion of deals in Tel Aviv (from 17% in the second quarter to 11% in the third quarter of 2015).
In the secondhand apartment segment, the average price in the third quarter was NIS 1.22 million, the same in real terms as in the third quarter of 2014 and 4.3% lower in real terms than in the second quarter of 2015. The Ministry of Construction and Housing attributed this to a prominent rise in the proportion of secondhand deals in the Haifa, northern, and southern districts, which could be one of the early signs of a revival in the market in outlying areas, and a drop in the apartment purchases for investment (from 30.4% in the second quarter of 2015 and 24.6% in the third quarter of 2014 to 14.9% in the third quarter of 2015).
The average price for secondhand three-room apartments was NIS 929,000, the same as in the preceding quarter. The average price for secondhand four-room apartments was NIS 1.28 million, 3% lower in real terms than in the preceding quarter. The average price for second-hand five-room apartments was NIS 1.72 million, 7% lower in real terms than in the preceding quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2015
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