The headlines this week were hard to digest – according to the Central Bureau of Statistics, apartment prices continue to rise. The Central Bureau of Statistics tells us, at the same time as the publication of the Consumer Price Index, that prices rose by 1.2%. But, we live here and see the slowdown, is this again idle data that does not connect to reality?
It may be so. Let’s start by saying that this is delayed data. Pay attention to what the Central Bureau of Statistics examines and what it publishes – “a housing price index that includes new and second-hand apartments (price change minus quality) – from a comparison of the prices of the transactions carried out in the months of September 2022 – October 2022, compared to the prices of the transactions carried out in the months of August 2022 – September 2022, It was found that apartment prices increased by 1.2%.”
The published index is for November and we receive the data for September-October. This is because of the preparation-processing process and the conclusions of the survey. It takes time, but it means that while the price index is published two weeks after the end of the month, the apartment price index is published a month and a half later and is relevant to the situation two to two and a half months later, because it checks two months and not one month. in simple words, We receive the data with a delay of at least two months, which is encouraging – because in these two months, the volume of transactions continued to decrease, the pressure on the contractors increased, and there is a good chance that there were decreases in apartment prices. In the field – the contractors are under pressure, they provide special offers, they chase the potential customers.
But that’s just one thing. The second matter is fascinating – the bureau provides us with two types of data, the main figure which consists of changes in the prices of new apartments and second hand it provides information on new apartments – “from the comparison of the prices of the transactions carried out in the months of September 2022 – October 2022 compared to August 2022 – September 2022, it was found that the prices of the new apartments decreased by 0.4%”.
Now it connects more to the terrain. There is actually a drop in prices and that was two or more months ago. So the updated data will probably show a more significant decrease. However, it should be remembered that the prices of the new apartments also include price-to-occupant-price-to-purpose transactions, etc. These deals are at discounted prices and lower the index. Without them, according to the CBS, the apartment price index rose by 0.8% – an annual rate of about 9%. Less terrible than the headlines of the week and the trend is a decrease.
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Another encouraging figure is the decrease in the construction input index. The historic increase in the construction input index was a significant factor in the increase in apartment prices – the contractors said, it’s getting more expensive for us and raised the prices. Now the index has decreased by 0.2%, and although it is too early to indicate a trend, there is no longer the pressure to raise prices from this direction. What does put pressure on the prices are – low volume of transactions, high interest rates and the need for contractors to sell to get cash flow. On the other hand, buyers see rising interest rates and the difficulty of taking out mortgages. This has already led to a moderation in the price increase of the contractors, and it is possible to carefully assess that in the last two and a half months the trend is clear – the prices are decreasing or at a relative stagnation.
And finally – the prices of course depend on the location and of course on the apartment itself, and of course the apartment market in the medium and long term is still, according to the current data, a market in shortage and plans are needed to dramatically increase the supply. But those who sit on the fence and all potential buyers, need to read between the lines. The media is flooded with “interested parties” or “position holders” who talk about the apartment market (including us!), and it is very possible that they really say what they think and their estimates that there will be no declines, are what they really think. By the way, they were right until today. It’s just not sure if they were right about the continuation – not sure they see the whole picture. What is certain is that what greatly affects the prices are messages, intimidation, references in the media. People jump off the fence and buy an apartment when they think there is going to be an increase (and let’s remember the grave mistake of Lieberman who said that apartment prices are going to increase by 5% and jumped the market by 20%). So maybe just stop being afraid and stick to the data. The stagnation or decline in apartment prices is on the way.
In the meantime, here are real estate transactions from the past week:
Jerusalem
A 5.5-room apartment on Ramban St., 123 square meters, + 7 square meters of storage, floor 1 of 4, with an elevator and parking, sold for NIS 6.45 million
6-room apartment, Ha’il Street, French Hill, 150 square meters, 2nd floor of 4,
Sold for NIS 3,030,000
Tzur Hadassah
7-room cottage on Karchum Street in Zur Hadassah, 7 rooms, 190 square meters, garden 50 square meters, balcony 20 square meters, private parking, sold for NIS 3.6 million
Beer Sheva
3-room apartment on Niv David Street, 99 square meters + 12 square meters of balcony, 5th floor out of 7, with elevator and parking, sold for NIS 1.09 million
4-room apartment, Yehuda Halevi Street, neighborhood B, 128 square meters, 8 square meters balcony, floor 14 out of 18, parking, elevator, sold for NIS 995,000
5-room apartment, Gershon Shopman Street, Neve Ze’ev neighborhood, 158 square meters, 12 square meters balcony, 7th floor out of 7, parking, elevator, sold for NIS 1,170,000
4-room apartment, Nahum Sharig Street, Ramot neighborhood, 122 square meters, 10 square meters balcony, 1st floor out of 3, parking, elevator, sold for NIS 1,290,000
3-room garden apartment, Herzl Greenspan Street, Nahal Eshan neighborhood, 130 square meters, garden 95 square meters, ground floor out of 3, parking, elevator, sold for NIS 1,380,000
Hadera
2-room apartment on Herbert Samuel Street in the city center, 70 square meters, 4th floor out of 4, no elevator and no parking, sold for NIS 1.08 million
Haifa
3-room apartment, Darech Shraft Street, Kiryat Shaprintsak neighborhood, 70 square meters, 3rd floor out of 4, sold for NIS 850,000
4-room garden apartment, Yitzhak Elhanan Street, central Carmel neighborhood, 124 square meters, garden 124 square meters, ground floor out of 7, parking, elevator, sold for NIS 3,940,000
Holon
3.5 room apartment, Mount Scopus Street, 70 square meters, balcony 12 square meters, floor 1 of 9, elevator, sold for NIS 1,980,000
4-room apartment, Nissim Bachar Street, 100 square meters, 14 square meters balcony, 5th floor out of 7, parking, elevator, sold for NIS 2,820,000
earing
5-room garden apartment, Sapir Street, 104 square meters, garden 100 square meters, ground floor out of 7, parking, elevator, sold for NIS 1,930,000
Afula
4-room apartment, Wolfson Street, 103 square meters, 4th floor out of 5, parking, elevator, sold for NIS 1,135,000
5-room apartment, Nordau Street, 117 square meters, floor 6 out of 8, parking, elevator, sold for NIS 1,100,000
4-room apartment, 13 Cinnamon Street, 90 square meters, 4th floor out of 4, sold for NIS 700,000
The data was collected from Rimex, Anglo Saxon and the Tax Authority data.