Home News New homes sales in Israel fall, as mortgage-borrowing also down

New homes sales in Israel fall, as mortgage-borrowing also down

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Demand for new homes is dwindling after months of rising home prices, according to a housing report from . Central Bureau of Statistics (CBS) Sunday.

According to the report, new sales were 10,970 units from April to June, down 14.4% from the previous quarter from January to March 2022.

New buyers may find it increasingly difficult to find the down payment they need at high home prices (Up 15.4% this year). An increase in purchase taxes for those buying property as an investment may also be starting to have an effect.

According to a CBS report, interest in real estate outside the central regions of Israel is on the rise.

Comparing April to June compared to January to March, the fastest growing housing markets were Or Yehuda, Lod, Rosh Ha’ayin, Dimona, and Kiryat Bialik. Both grew more than 50% quarter-on-quarter, suggesting potential buyers are looking outside of the big cities for value for money.

About a quarter of all new apartments sold between April and June 2022 were in the Central Region, with Netanya (624), Tel Aviv Jaffa (561), Ashkelon (489), Ramat Gan (473) ), concentrated in Jerusalem (464). The biggest quarterly declines in transactions were seen in Ashkelon, Rishon Lezion, and Beit Shemesh.

Nevertheless, the largest number of apartments sold since January were in Tel Aviv-Yafo with 1,206, Ashkelon (1,221) and Netanya (1,117).

Meanwhile, the government’s role in the housing market seems to be steadily increasing through various affordable housing schemes. Between April 2022 and his June, 25.5% of apartments were sold with government subsidies.

Other signs that market demand is dropping and people may be eyeing cheaper properties include: borrowed from mortgage The total amount fell to 10.1 billion NIS ($3.1 billion) in July from 11.9 billion NIS ($3.7 billion), according to the Bank of Israel.

It is too early to attribute the decline in borrowing to higher interest rates, but it seems plausible to link it to a decline in real estate transactions.

Additionally, the government’s focus on building more apartments and doing it faster is starting to take its toll on the labyrinthine development process. Construction will begin between April and June 2022, with about 5,000 apartments, a 5% increase from the last three months, according to the report.

Although improved, these volumes 70,000 new builds per year Politicians aim to bring down home prices and buyer demand, and experts say it’s necessary.

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