New home sales in Israel fell 16% in 2016

new homes

The steep drop is attributable to a drastic fall in property purchases by investors, the Finance Ministry chief economist reports.

An examination by the Ministry of Finance chief economist department found that the steepest falls in new home sales were in Tel Aviv, Eilat, Afula, Kiryat Gat, and Yokneam Ilit.

The figures show that sales of new homes dropped by 8% in 2016, compared with 2015. Excluding sales in the buyer fixed price plan, the decline was a steeper 16%. The inventory of unsold new housing also rose. Leading the steep drop was the virtual halt in purchases of new housing by investors, who purchased a mere 2,500 new housing units, 50% fewer than in 2015. The decline in housing purchases for investment explains 60% of the nationwide increase in the inventory of unsold housing.

The number of new housing units sold in Tel Aviv plunged from 2,014 in 2015 to 1,255 in 2016, a 39% drop. The number of new housing units sold in Ramat Gan declined from 1,592 in 2015 to 1,144 in 2016, a 28% decrease. The number of new housing units sold in Jerusalem went from 1,926 in 2015 to 1,412 in 2016, a 27% slide. The number of new housing units sold in Herzliya fell from 523 in 2015 to 451 in 2016, a 14% decrease. 208 new housing units were sold in Eilat in 2016, down 42%, compared with 360 in 2016. 452 new housing units were sold in Modi'in-Maccabim-Reut in 2016, down 16%, compared with 537 in 2015.

While investors were the biggest segment in the Ramat Gan market in 2015, they were a far smaller segment in 2016. While investors accounted for half of all new housing purchased in Herzliya and Eilat in 2015, this proportion fell to one third in 2016.

There were three communities (Kfar Saba, Herzliya, and Modi'in) in which purchases by young couples increased in 2016, but the aggregate increase in their purchases was only 54 new housing units.

Purchasers of first homes reduced their purchases by 31%, amounting to 1,800 new housing units, while the decline among those purchasing better housing units was a more moderate 15%.

Published by Globes [online], Israel Business News - www.globes-online.com - on May 17, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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