The Chief Economist Division of the Ministry of Finance published this morning (Wednesday) the real estate survey for October, which shows that 14,400 apartments were purchased, the highest number since June 2015, which overshadowed investors’ purchases before raising the purchase tax. Compared between October 2021 and October 2020, a significant increase of 87% was recorded.
The high level of transactions was mainly affected by an unusual increase of 236% in investor purchases compared to October last year, which amounted to 4,800 apartments. The percentage of investors in total acquisitions last October reached a third – the highest rate since June 2015. A quarter of investors’ acquisitions in October were made on the last day of the month in which the decision to raise the purchase tax was announced. Similar to the move made in June 2015, following the actual tax increase, a significant moderation in investor acquisitions is expected.
The segmentation of investor purchases by city shows that although Tel Aviv led the investor acquisitions, its growth rates in these acquisitions, and in other expensive cities, were significantly lower than those recorded in the cheap cities, such as BS and Haifa. The highest level since June 2015 and an increase of 98% compared to October last year.However, the “inventory” of apartments by investors increased soon to two thousand apartments, the highest monthly increase since June 2015.
Contractor sales in October totaled 5,500 apartments, the highest monthly level in new apartment sales in at least the past twenty years. Compared to October last year this is an increase of 86%. After deducting the sales with a government subsidy, the sales of the contractors in the free market amounted to 4,500 apartments, an increase of 131% compared to October last year.
Purchases of “first apartment” totaled 5,300 apartments in October, including “price per occupant”, an increase of 47% compared to October last year. After deducting “price per occupant” purchases, the purchases of young couples in the free market amounted to 4,200 apartments, an increase of 65% compared to October last year. 68% of the apartments purchased by young couples in the free market in October were exempt from purchase tax. In peripheral areas this rate reaches over 90%.
Purchases of housing improvers in October amounted to 4,300 apartments, an increase of 61% compared to October last year. Preliminary data for November indicate an abnormal level of transactions, particularly in investor purchases, before the tax increase, which took effect on 28 November.