Home sales hit 10-year high

Finance Ministry: 12,400 new and second-hand homes were sold in May, 32% more than in April.

Home sales hit a ten-year high in May 2013, ahead of the VAT hike on June 2, the Ministry of Finance reported today. 12,400 new and second-hand homes were sold in May, 32% more than in April. New home sales rose 64% in May, compared with April, and second-hand home sales rose by 24%.

Investors drove the rise in home sales; the number of homes bought by investors was 53% higher in May than in April. The proportion of investors was 4 percentage points higher in May than in April, after falling by 5.2 percentage points between September 2012 and April.

"It can be assumed that purchases by investors contributed to the sharp increase in purchases, because of the interest rate cut by the Bank of Israel and the VAT hike in June (a fact expressed, among other things, in the increased proportion of new homes of total homes bought by investors in May)," states the Ministry of Finance.

There was an extraordinary increase of 9 percentage points in the proportion of investors in Beersheva, and a low point in this region in April. "The entry of new investors in this region stands out: 73% of buyers of homes for investment in this region in May were making their first purchase of a home for investment in ten years, an increase of 9 percentage points, compared with the average in the first four months of the year. Nationwide, there was a modest increase of two percentage points in the proportion of new investors in May."

There was a 50% increase in the number of buyers of bigger homes in May, compared with April, and a 7% increase in the number of first-time homebuyers.

The VAT hike appears to have cooled the real estate market. "Preliminary data for June indicates a sharp drop in transactions compared with May, especially for new homes," says the Ministry of Finance.

Published by Globes [online], Israel business news - www.globes-online.com - on July 11, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018