Home News Israel sees sharp drop in new home sales, but prices holding steady

Israel sees sharp drop in new home sales, but prices holding steady

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Israeli new home sales have plummeted in recent months, according to data released Tuesday. Central Statistics Office, Rising interest rates and new purchase taxes have shown that they can help cool the country’s overheated real estate market.

From February to April 2022, more than 12,380 new apartments were sold. These seasonally adjusted figures represent a 9.12% decrease in new apartment sales.

However, despite slowing purchases, mortgage borrowing remained at record highs and there were no immediate signs that real estate prices began to fall.

Growth in new condominiums sold monthly from April 2018 has been seen, and this seasonally adjusted slowdown suggests that demand for new condominiums has declined since November 2021.

The busiest markets where at least 700 apartments were replaced during the three months from February to April were Tel Aviv and Yafo, Rishon LeTsi, Bait Shemesh and Ramat Gan. The markets where the number of apartments sold slowed the most were Be’er Yaakov, Netanya, Ashkelon, and Bnei Brak.

As of the end of April 2022, about 44,000 new apartments are on the market, and the amount is quite widespread throughout the country.

Analysts attributed the decline in new home sales to buyers’ attention amid rising interest rates and higher purchase taxes imposed on those who buy a second property in November.

However, the April decline could also be due to the Passover festival holidays. This means that there are fewer business days to complete the transaction. It may also be because people are turning more and more into the second hand market.

But many expect it to show something more substantive that anyone looking at the market can agree on. 16% increase from the previous year What we have seen recently is unsustainable given that wage inflation rises much slower.

But despite the decline in the number of new apartments, the Bank of Israel Number of mortgage loans New borrowings in April amounted to 418 million shekels, a total of about 12 billion shekels per month since January 2022. This is an increase in the price paid by people who buy real estate and an increase in the cost of mortgages as interest rates begin to rise, assuming you are borrowing the maximum amount allowed (75% of the total amount of real estate). Reflects.

More data will be released in the coming days, with an explicit view of market prices. First quarter of this year, the last period of data at this time, Average apartment cost In Israel, the average monthly rent has risen from NIS 1,756,000 (4th quarter of 2021) to NIS 1,757,000 ($ 505,840) and average monthly rent to NIS 4,153.6 (from NIS 4,112.6). These relatively small increases do not reflect the significant rise in the most popular Israeli real estate market. In Tel Aviv, the average apartment price is NIS 2,505,000 ($ 721,189), about 10 times higher than the market as a whole. Despite a 2.6% increase throughout the year Average monthly income In 2021, it was NIS11,773 ($ 3,389).

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