Is the pace of recovery in the residential real estate market in Israel slowing down? Central Statistics Office figures show a decline in home purchases at the end of the summer, but no firm conclusions can be drawn yet, and developments in the war may have had an impact.
In August, 7,250 homes were sold, 3% more than in August 2023. 3,940 were used homes and 3,310 were new. New home sales rose more than used home sales.
The supply of unsold new homes grew, reaching 69,720 at the end of August, 19% higher than at the end of August 2023.
The cities that topped new home sales figures from June to August were Jerusalem, Tel Aviv and Ofakim. Used goods sales were led by Jerusalem, Haifa and Beersheba.
New home sales in August of this year were 20% lower than in the previous three months. Compared to the decline recorded in August 2023, the number of transactions increased, but the decline in August compared to previous months is still a surprise, especially the strength of the decline. But in wartime, it is reasonable to assume that as the bombing becomes more intense (as we are seeing now, mainly from Lebanon) the number of deals will decrease, and the more the public feels that the war is coming to an end. In the end, the more trades there are.
The new and used markets are very different. From August 2023 through August 2024, the number of new homes sold rose an average of 4.3% per month, although there was a slight decline from July to August. As mentioned, it is not yet possible to determine whether this represents a change in trend.
In second-hand homes, there was an average monthly rise in transaction numbers of 3.1% in the same period.
The gap between sales rates in the new and used markets has led to a situation where about 40% to 50% of all homes sold are new homes, which compares to a historically normal rate of 20% to 30%. The market assessment is that the financial incentives offered by developers and the lack of protected spaces in many used homes for sale are attracting buyers to the new home market.
Jerusalem is the leader in buying new and used homes. In Tel Aviv, people are mainly looking for new homes; More than 60% of homes sold in the city are new. In Haifa, which ranks third, the situation is the opposite of the situation in Tel Aviv, and the majority of homes sold are used. The situation in Beersheba is similar.
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The supply of new homes is at a historic high, with nearly 70,000 homes waiting to be sold each month for several months. About 80% of them are in Tel Aviv, 9% in Jerusalem, and 5% each in Bat Yam and Netanya.
Published by Globes, Israel Business News – en.globes.co.il – on October 13, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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