New apartment sales in Israel down 6.7% in 2016

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Data from the Central Bureau of Statistics and Ministry of Finance indicates that Israel's housing market is finally cooling down.

The number of housing units sold in July was slightly greater than in June, but substantially less than the number sold in July 2015, according to figures for sales of new housing units by contractors published today by the Central Bureau of Statistics.

The figures show that 2,416 new housing units were sold in July 2016, compared with 2,380 in the June 2016, a 1.7% increase, but 19.3% less than the 3,003 new housing units sold in July 2015. The numbers for January-July this year also show a 6.7% decline in sales of new housing units, compared with the correspondent period last year.

The Central Bureau of Statistics report also included a figure for the demand for new housing units - a combination of the number of new housing units actually sold with the number of new housing units not for sale (housing units commissioned by buyers groups, built in the framework of the build-your-own-house plan, rental housing construction, etc.). According to this figure, demand for housing is falling, totaling 4,004 housing units in July 2016, compared with 4,172 in the preceding month and 4,456 in May 2016.

At the same time, another figure continues to show an increase in recent months - the number of new housing units still for sale at the end of the period, calculated by the Central Bureau of Statistics at 28,066 in July 2016. These housing units are in various stages of construction, not necessarily housing units that are not being sold.

Decrease in Haifa and Tel Aviv

According to district, the steepest fall in sales of new housing units was in the northern district, where 228 units were sold in July, compared with 318 in June. At the same time, a drop was also posted in the Tel Aviv district, where 324 new housing units were sold in July, compared with 414 in June. Fewer housing units were also sold in Judea and Samaria, where the figures show 44 new housing units sold in July, compared with 79 in June. Nevertheless, in the other districts, the comparison between July and June this year show an increase in the number of housing units sold.

At the same time, an examination of the number of new housing units sold since the beginning of the year by district, in comparison with the corresponding period last year, shows that the number of new housing units sold fell 15% in the northern district during this period, 13% in Jerusalem and Haifa, 10% in Tel Aviv, and 1% in the central district. On the other hand, the number of new housing units sold in the southern district rose 12%.

Finance Ministry: Fewer real estate deals in the second quarter

Simultaneously with the Central Bureau of Statistics report, the Ministry of Finance chief economist department is today publishing a review of the second quarter indicating a fall in the volume of residential real estate deals in the second quarter, mainly in new housing units and mainly in the young couples market segment.

The review also indicates that the proportion of investors remains low, and the number of housing units sold by investors is greater than the number purchased by investors.

28,500 housing units were purchased in the second quarter, down 5%, compared with the preceding quarter, and down by a steeper 21%, compared with the number of deals recorded in the corresponding quarter last year, after investors brought their purchases forward in order to avoid the increase in purchase tax, according to the review.

According to geographic district, it was found that only in Nazareth and Rehovot, where sales in the framework of the buyer fixed priced program took place, was there an increase in the number of deals; this increase was entirely attributable to sales in the framework of these projects. Sales were down in the other regions, including the central region, where housing units were marketed in the target price program, but not in a large enough volume to prevent a drop in total deals.

As in the preceding surveys, the Ministry of Finance also notes in the current survey that investors led the decline in purchases with an 11% drop. The figures also show that purchases by those seeking better housing dipped 8%, while purchases by young couples, excluding purchases in the buyer fixed price program, slid 5%.

Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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