The Ministry of Finance today published figures showing a 42% surge in apartment purchases to a record 16,100 apartments in June. The reason is obviously the increase in purchase tax on apartments for investments initiated by Minister of Finance Moshe Kahlon, which caused many investors to rush to buy apartments. The number of apartments purchased in June was 15% higher than the previous record in December 2013.
"While the December 2013 record resulted from a wave of sales by investors before the cancelation of the exemption on betterment tax for those owning an additional apartment, the current record was caused by investors bringing their purchases forward before the purchase tax hike for these buyers came into effect in late June," the Ministry of Finance's survey stated.
Investors led the June surge in sales, and their purchases also set a record: 6,400, 90% higher than the previous record set in December 2010. In other words, investors accounted for 40% of all apartments purchased in June.
According to districts, the Tel Aviv area stood out with a 120% rise in June in apartments purchased by investors, in comparison with May. Investors bought almost 1,000 apartments in Tel Aviv in June, accounting for 60% of all sales transactions there. Purchases by investors were up 100% in Netanya. According to Ministry of Finance figures, investors who bought apartments in Netanya in June were older (the median age was 59, compared with 55 in January), the salaries of employed investors were higher, their occupations were more prestigious, and the apartments they purchased were more expensive.
Apartments purchased by young couples were also up in June, but by only 4%. On the other hand, the number of those purchasing a better apartment to replace the one they had jumped 30%.
Preliminary figures from the Ministry of Finance show that the market cooled off after June: "Initial figures for July indicate a sharp drop in the number of transactions, and a particularly low rate among investors."
Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015