Real estate investors bought 4,800 apartments in October 2021, the largest amount since June 2015. Compared to October last year, when investors bought 1,400 apartments, this is a jump of 236%; according to the chief economist at the Ministry of Finance, Shira Greenberg. In October, 14,400 transactions were recorded for the sale of an apartment, the highest monthly number of transactions since June 2015, the month with the highest volume of transactions ever in which 16,000 transactions were made – on the eve of the purchase tax increase for the first time.
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Greenberg notes that the amount of transactions made in October this year is the largest recorded in October in the last 20 years.
The most prominent beneficiaries of the market revival are of course the contractors, who sold 5,500 new apartments in the month surveyed – the highest number in at least the last 20 years. By comparison, in October 2020 the contractors sold only 3,000 apartments, so the October 2021 figures are 87% higher. Compared to September this year, this is an increase of 82%. About 1,000 of the apartments sold by contractors were sold at a price per occupant, and the rest on the free market.
The high October figures are probably just a promo for the volume of deals recorded in November this year, which Greenberg’s next review will address. She writes that “preliminary data for November indicate an abnormal level of transactions, especially in investors’ purchases, before raising the purchase tax, which came into force on the 28th of the month.”
Due to the plan to raise the purchase tax from 5% to 8%, vigilant and up-to-date investors were in a hurry to purchase apartments as early as October. However, the official announcement of the intention to raise the tax was made only on the last day of this month. On the same day, investors purchased 1,186 apartments, which is about a quarter of the number of apartments they purchased throughout the month. In the initial 3 weeks of October, investors purchased an average of 155 apartments per day.
During November, the government acted to approve the tax increase, the Knesset Finance Committee approved the increase on the 22nd of the month and the next day it passed a third reading in the Knesset. On November 24, the Ministry of Finance announced that the law would enter into force at the beginning of the week, ie on the 28th of the month. All of these events were accompanied by media reports that encouraged investors to sign deals.
In the segmentation of investor purchases by real estate taxation areas, it was found that the Beer Sheva and Haifa areas led the acquisitions in October, with a similar number of transactions, totaling 762 apartments. In the Tel Aviv area, investors bought 735 apartments. However, in the city of Tel Aviv, investors bought the most apartments: 456 in number.
In second place is Haifa, where investors bought 349 apartments; The third place was taken by Bat Yam, where investors bought 292 apartments, mainly following a sale of areas to a member club of permanent military servants. In Be’er Sheva, which has always interested investors, they bought 266 apartments, and in Jerusalem 258.
It is worth noting that investors also sold quite a few apartments – 2,900 in number, the highest level since June 2015 and an increase of 98% compared to October last year. Thus, the inventory of apartments held by investors increased by 1,800, the highest increase since June 2015. In total, in the last 12 months, the inventory held by investors increased by 3,500 apartments, but until September the increase was mainly due to REIT funds purchasing housing files, while now These are the private investors.
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