The Central Bureau of Statistics reported last week that home prices in Israel in January-February 2023 declined by 0.2% compared to December-January 2023. Although home prices increased by 12.7% over the past year, the latest data indicates a change in trend as higher interest rates and more expensive mortgages dampen the housing market.
But a closer look at the data shows that prices are still rising in some areas of the country. In the northern region (the north excluding the Haifa district) housing prices in January-February 2023 increased by 2.2% compared to December-January 2023. There was little new construction in The area is such that demand outstrips supply, although this is currently the cheapest area in the country with an average home cost of NIS 1.3 million.
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Prices also rose 0.2% in the central region, which does not include Tel Aviv. In Tel Aviv itself (Tel Aviv, Ramat Gan, Givatayim, and Ramat Hasharon), the average house price decreased by 0.5% in January-February 2023 compared to December-January 2022. District Tel Aviv is the most expensive in the country with an average home cost of NIS 3.1 million, and in the current economic climate, such high prices may not be sustainable. Prices also fell 0.5% in the Haifa region, which includes Craio, Hadera and Pardes Hana-Karkur. It is not clear why prices are so much lower in this area where home prices are more modest.
Prices in January-February 2023 decreased by 1.1% compared to December-January 2023 in the Jerusalem area, which includes Beit Shemesh and Mevaseret Zion. The average cost of a home in the area is NIS 2.1 million and it is possible that the approval of 8,000 new homes over the past four years in Beit Shemesh has made developers flexible in asking price for new apartments.
From January to February 2023, prices decreased by 1.5% compared to December and January 2023 in the southern region, which includes Beersheba, Ashkelon, Ashdod, Kiryat Gat, and Kiryat Malachi. Prices in this region have fallen by 3.3% over the past four months.
Published by Globes, Israel business news – en.globes.co.il – on April 18, 2023.
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