Treasury: New home prices down in January

The median price for a new home was NIS 879,000 in January, 13.5% less than in the corresponding month.

The Ministry of Finance says home prices continue to fall, belying Central Bureau of Statistics figures, published last week, which showed that the fall in prices had stopped, and that they even rose slightly in December 2011 and January 2012.

The Ministry of Finance reported today that 7,300 apartments were bought in January, about the same number as were purchased in December, but 13% fewer than in January 2011. In November-January, purchases of homes stabilized at 10% higher than in August-October, but were 25% less than in the corresponding months.

Prices for new homes were 1.2% less in January than in the preceding month. The median price for a new home was NIS 879,000 in January, 13.5% less than in January 2011. Home prices fell by 2-3% in Jerusalem and the Sharon in January, compared with December, but were stable in the coastal plain.

10% fewer apartments were bought for investment in January than in December, and 24% fewer than in the January 2011. Apartments bought for investment accounted for 24% of all deals in January.

The Ministry of Finance says that, since October 2011, the proportion of investors in the housing market has been stable at around 24%, and that preliminary figures for February indicate no change in this level. When investors were most active in the housing market, in 2009 and in late 2010, they accounted for a third of total sales.

The largest drop in home purchasing activity by investors was in Beersheva, where they had been dominant in recent years. Investors accounted for 22% of home purchase in January, the lowest level since 2003. The number of apartments bought for investment in January was nearly halved compared with January 2011.

Simultaneously with the drop in purchases of homes by investors in Beersheva, sales of homes by investors in the city rose by 2%, continuing the trend of the previous three months. For the first time in two years, the net number of homes owned by investors in the city fell. Beersheva was the only city where this happened. Nationwide, there was no change in the proportion of second-hand homes sales by investors.

The Ministry of Finance reports that 28% of homebuyers in January bought a new home before selling their current home, 6% fewer than in December. The drop in this figure was double in the coastal plain, which has the largest proportion of conditional sales (in which the buyer has not yet sold his current home), apparently because of concerns by people committing to buy better homes before selling their current home, due to the stagnant market.

Published by Globes [online], Israel business news - www.globes-online.com - on March 18, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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