Israel's residential market is cooling, according to the Ministry of Finance, which today reported that home prices fell again in February 2010, continuing a trend that began in October last year. Home sales also fell in February, a trend that began in December.
The Ministry of Finance said, "The number of homes sold fell by 1% in February, for the third consecutive month. The drop was less than the decline in January. In several regions, especially Tel Aviv and Beersheva, the decline in the number of transactions was mainly due to a plunge in purchases of apartments for investment."
The ministry's figures showing a drop in purchases of apartments for investment are due to the rise in the interest rate and in the stock market rally. "The proportion of apartments bought for investment out of all transactions in the Tel Aviv region fell sharply in February to its lowest level in years," said the ministry.
The Ministry of Finance said that the median price of new apartments fell by 0.2% in February to NIS 1.1 million, after falling by 0.6% in January. However, the average apartment price of new and second-hand apartments, reported by the Central Bureau of Statistics, rose by 2.8% in February to NIS 1.03 million.
The Ministry of Finance said, "The drop occurred in almost all the regions, except for Rehovot and Jerusalem, where prices rose by 1.3% in February. It should be noted on this point that the rise in new apartment prices in Jerusalem during 2009 was less than in all the regions."
Published by Globes [online], Israel business news - www.globes-online.com - on March 24, 2010
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