New apartment sales by contractors hit a 10-month low in September 2015, according to figures published today in a demand survey by the Central Bureau of Statistics.
According to the figures, 2,332 new apartments were sold in September, 16% less than the number sold in August. The Jewish holidays of Rosh Hashanah, Yom Kippur and Sukkot all fell during September 2015, so there were fewer working days in the month, which would explain the relatively low number of apartments sold. At the same time, in comparison with the September 2014, the number of new apartments purchased was up 23%. The reason is that in September 2014, buyers were still being influenced by the zero VAT plan promoted by then-Minister of Finance Yair Lapid, which depressed sales in April-November 2014.
At the same time, it is possible that increasing the tax burden on investors, which went into effect in late June, also affected the September 2015 figures. Support for this possibility can be found in a glance at a breakdown of new apartment sales according to geographic region. The districts where the biggest decline took place were Haifa, the central district, and Tel Aviv, where investors made up a considerable proportion of the apartment buyers. In the Tel Aviv district, which headed the list, the number of new apartments purchased plummeted from 867 in August to 574 in September, a difference of 293 apartments. A considerable drop also occurred in the Haifa district, where the number of apartments purchased fell from 599 in August to 377 in September, a difference of 222.
Concurrently with the fall in new apartment sales, the number of new apartments not for sale also tumbled. These involved apartments being built by buyers groups, independent construction, etc. According to the figures, there were only 1,170 apartments in the category in September, compared with 1,519 in the preceding month, a 23% drop. A closer look at the figures shows that this is the lowest rate of apartments in years. One explanation for the steep fall in this figure could also be the drop in the volume of business by purchasing groups, especially in light of the fact that it was already known in September that they would be unable to take part in state tenders on the buyer fixed price format, and in private construction.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2015
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