There were 9,700 home purchases in Israel in January 2017, 5% fewer than in the previous month, according to the survey of the chief economist in the Ministry of Finance released today. In comparison with January 2016, the figure represents a 3% rise in home purchases. According to the survey, a rise in sales by those holding investment properties offset a continuing sharp decline in purchases of new homes.
The decline in purchases of new homes encompasses all market segments, with young couples waiting for "buyer price" projects. Heavier taxation of those buying homes for investment has also had its effect.
The district with the sharpest decline in purchases is Rehovot. In this district, sales in "buyer price" projects, in which developers bid for land on the basis of the lowest price of the apartments to be constructed, began in the third quarter of last year (mainly in Rishon LeZion). Just 240 new homes were sold in this district in January this year, 45% fewer than in the previous month and in January 2016.
The proportion of investors in apartment transactions in January remained low, at 17%. Investors bought a total of 1,600 homes that month, 2% fewer than in the previous month and 18% fewer than in January 2016. Sales by investors rose 25% in January 2017 in comparison with December 2016, amounting to some 3,000 apartments.
The decline in purchases by investors is mostly in the new home segment (down 30% in comparison with January 2016 and 18% in comparison with December 2016). This may be a manifestation of the effect of the multi-home tax, which is 1% of the value of the home.
Published by Globes [online], Israel business news - www.globes-online.com - on March 12, 2017
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