Rising housing prices, despite the recession and rising unemployment, is making it harder to buy an apartment. The Mishkan Hapoalim Mortgage Bank Homebuyers Index fell by 7.7 points in June 2009 to 146.4 points. The 5% monthly drop is the largest fall in ten years.
Bank Hapoalim notes that drop reflects a "serious deterioration in the condition of homebuyers." The bank attributes the worsening situation to rising prices for apartments, the rise in unemployment, and a rise in mortgage interest rates.
The Mishkan Homebuyers Index is a monthly measure of the climate for home buyers. It is composed of four variables published by the Bank of Israel and the Central Bureau of Statistics: the mortgage interest rate, apartment prices, the average salary, and the unemployment rate. The index has fallen 13.7% over the past year, its largest 12-month decline since the index was inaugurated in 1996.
The Central Bureau of Statistics reports that apartment prices rose by 1.3% in June. Prices have risen by 12.6% over the past year.
Bank Hapoalim says, "The drop in the Mishkan Index is due to the worsening of its components. The low interest rate and limited inventory of apartments have supported the rise in apartment prices over the past year, despite the recession, rising unemployment, and salary cuts."
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2009
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