Homes sales reach 10-year high

The Ministry of Finance reports that young couples are flocking to buy new and second-hand homes in cheaper cities.

Young couples do not seem to believe the declarations being made by the government that apartment prices will start falling and they have been flocking to buy homes in cheaper cities. Figures published today by the Ministry of Finance show that 32,000 homes were bought in the second quarter of 2013 (new and second-hand homes) - a peak that has not been seen since the data was first recorded more than a decade ago. The number of home purchases in the second quarter was up 24% from the first quarter.

The Ministry of Finance survey said, "The growth in deals in the second quarter was led by young couples with a rise of 30%, after two consecutive quarters of falls. Overall young people bought 13,000 apartments in the second quarter."

"The data shows that the rise in the purchase of apartments by young couples was highest in the Hadera region (following augmented marketing of land at Harish-Katzir) and the Jerusalem region, partly due to a sharp growth in deals at Beitar Illit. In Jerusalem itself there was a sharp rise in the purchase of second-hand apartments by young couples, among other things, because of giving the Jerusalem grant and higher sales by investors."

The Jerusalem grant of NIS 100,000 to homebuyers provoked a 40% rise in apartment purchases by young couples in the capital. The rise was mainly in second hand apartments."

The average price of a new apartment bought in Katzir-Harish was NIS 682,000, 43% lower than the average price of an apartment bought by young couples nationwide.

There was a 20% rise among apartments bought by people moving up to better homes and investors in the second quarter. However, the percentage of investors buying apartments overall was the lowest since 2003. Tel Aviv region led in the growth of investors buying homes but there was also a sharp rise in the number of investors selling homes in the region.

At the same time the Ministry of Finance reported that, "There was a substantial fall recorded in the level of prices of new apartments bought by investors. It can be assumed that the heavier taxes and worsening financing terms contributed to this."

In total 6,700 apartments were bought in the second quarter by investors.

Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2013

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

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