Stabilization, probably temporary, in the new apartment market: Since last July, the monthly volume of new apartment purchases has stabilized, and it reaches 2,800-2,900 apartments, with the exception of last October when the Tishrei holidays fell. And the market trend is still downward, although at a slower rate than the one recorded after the first interest rate hikes. This is according to the CBS data. Another notable finding is the continued decline in transactions in Tel Aviv, which between the months of September and October only reached sixth place in the volume of sales of new apartments there.
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In the three months of September-November 2022, approximately 7,650 new apartments were sold, of which 1,500 were under the “Resident Price” program. This is a decrease of 18.1% compared to the previous three months (July-September 2022).
Examining the trend data shows that from the month of August 2021 there was a decrease at an average rate of 4.1% per month, however since April last year the rate increased to 5.3% on average, much because of the months from May to August when the decrease was at a record pace. In recent months, as mentioned, the pace has slowed down. In November of last year, about 2,900 new apartments were sold, a decrease in the trend line of 2.1% compared to the previous month.
As mentioned, between July and November 2022 there was a stabilization in the number of new apartments purchased, reaching 2,800-2,900 per month. This is a similar rate to that of the first quarter of 2016 and the beginning of 2019. Although this is a steep decline compared to the sales peaks in 2021, it is however far from the depression periods. Still, the decline in the market continues, at a considerable pace, so this is not the end of the decline.
The leading cities in selling new apartments. Source: CBS
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search: A number Yishuv September-November 2022 Percentage change compared to the previous 3 months 1 Jerusalem 491 18.3- 2 Qiryat Gat 463 408.8 3 Ashkelon 462 35.9 4 Kiryat Malachi 321 358.6 5 Netanya 283 46.9- 6 Tel Aviv Jaffa 277 43.7- 7 Haifa 246 15.0 8 Ramat Gan 235 2.5- 9 Rishon Lezion 223 50.7- 10 Petah Tiqwa 221 3.1- 11 Beit Shemesh 188 10.0- 12 Beer Sheva 166 46.5- 13 Yavne 151 251.2
New apartments waiting 19 months on the shelf
Other parameters that indicate the problems the construction industry has encountered are the shelf life of new apartments, which reached 19 months in November 2022, twice as long as in November 2021 and a record that has not been remembered here for years; The supply of apartments, embodied in the unsold inventory of new apartments, also increased by 9% within a year, which indicates that developers are finding it increasingly difficult to sell their apartments. Thus, as of November 2022, 50,085 new apartments have not yet been sold. This is a record volume of two and a half years, when in April 2020 there were 51,159 new apartments that were not sold and will wait about 14 months on the shelf.
In terms of the places that excelled in terms of sales of new apartments in September-November 2022, Jerusalem came in first place with 491 apartments, Kiryat Gat came in second place with 463 apartments, followed by Ashkelon (462), Kiryat Malachi (321), Netanya (283) and Tel Aviv, where they were purchased In these months only 277 apartments.
Tel Aviv has led the table of sales of new apartments for the past few years, and the large drop in it is part of a very large drop recorded in the Tel Aviv market in recent months, which we have previously written about in Globes. It seems that the crisis in the high-tech industry, together with the very high prices of the apartments in the city and the high interest rates, are keeping many buyers away from the Tel Aviv market.