According to the latest housing market survey by the Treasury’s chief economist, 8,909 homes were sold in July 2024, up 29% from July 2023, mainly due to special discount offers offered by builders. The survey shows that the market recovery is continuing, although it should be noted that July 2023 was the lowest number of home sales since the early 2000s. The July 2024 figure was 8% higher than June 2024. Subtracting the number of new homes sold under government-backed programs, 8,126 homes were sold in July 2024.
The study notes that when comparing July 2024 historically to the number of housing transactions in July throughout this century, July 2024 ranked somewhere in the middle.
“This is a relatively higher rating than the rating recorded in the previous two months, mainly due to the relatively high level of new apartment sales,” the survey said.
The Beersheba area stood out in contractor sales, with 615 new apartments sold at an average price of NIS 1.7 million. “This is one of the highest levels of contractor sales in this area in the past 24 years, and more than a quarter of the apartments sold are located in Netivot,” the survey said.
It was also noted that more than half of the apartments in the Beersheba area were purchased by first-time buyers. The average salary level for the families of these buyers is 17,600 shekels (total monthly, per family).
Investor purchases in northern cities fell sharply
Total purchases by investors amounted to 1,390 apartments, up 36% from the low recorded in July last year. Compared to the previous month, there was a moderate increase of 5%. About 16% of purchases were by investors in July 2024, which is 0.6% higher than in July 2023.
The leading cities in investor purchases in the first seven months of 2024 were Tel Aviv, Jerusalem and Haifa. Growth rates were recorded at 58% and 78% in Tel Aviv and Jerusalem respectively, while Haifa saw a 7% decline. In Beit Shemesh, there was a sharp increase of 117% in investor purchases, while the northern cities stand out with sharp declines, especially Kiryat Shmona and Safed.
Prominent in the companies’ cash flow are the 80/20 offers made by contractors, where buyers buy an apartment “on paper,” paying up to 20% upon signing and the balance when the apartment is ready for occupancy. According to the survey, the potential flow to contractors from the sale of new apartments in July was NIS 9.1 billion – 49% higher in real terms than in July of last year. But an analysis of the actual flow, based on VAT reports, found that it increased at a relatively moderate rate of 14%. “This reflects, among other things, the financing operations of contractors,” the survey says.
This article was published in Globes, Israeli Business News – en.globes.co.il – on September 12, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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