In November, 7,800 apartments were purchased (including government subsidies), a decrease of 57% compared to November 2021, according to a review by the Chief Economist’s Division at the Ministry of Finance. The division’s economists pointed out that this sharp drop is partly explained by a particularly high level of transactions in November last year, when investors rushed to close transactions before the purchase tax increase. However, the level of transactions last November is still one of the lowest recorded in November in the last twenty years and the lowest in the last ten years.
Deducting the purchases as part of the “Resident Price” the number of transactions on the free market in November was 7,200 apartments, a 58% decrease compared to November 2021 and the lowest level recorded in the number of transactions on the free market since the outbreak of the Corona epidemic (excluding holiday months).
Investors are abandoning
Investor purchases in November amounted to 1,300 apartments, a drop of an unusual rate of 80% compared to November 2021, this is, among other things, against the background of a high level of investor purchases in November 2021, before the increase in the purchase tax. However, this is still a low level of investor purchases (42% lower compared to November 2020). As a percentage of total transactions, the weight of investors was 16.8%. Lower by twenty percentage points compared to November last year and lower by 1 percentage point compared to last October.
Investor sales in November amounted to 1,700 apartments, a sharp decrease of 54% compared to November 2021, although the rate of decrease is slightly less sharp than that recorded in the sale of second-hand apartments. The “inventory” of apartments in the hands of investors continued to decrease, when during the month about four hundred apartments were removed from it.
Contractors’ sales in November totaled 2,900 apartments, a 56% decrease compared to November 2021. Excluding the sales within the “Resident Price” framework, contractor sales in the free market totaled 2,300 apartments, a 57% decrease compared to November 2021.
In the market segment of second-hand apartments, the number of transactions amounted to 9.4 thousand, a decrease of 58% compared to November 2021. This is the lowest level in the market segment of second-hand apartments in the months of November since 2003, which stood in the shadow of the second intifada. That is, the weakness in the market segment of second-hand apartments is deeper than that in the market segment of new apartments, this is, among other things, against the background of sales promotions conducted by the contractors. In the areas characterized by higher price levels, the decrease in the number of transactions is deeper and is particularly noticeable in the Tel Aviv and Central areas.
“First apartment” purchases (mostly young couples) in November amounted to 9,300 apartments, a 34% decrease compared to November 2021, the mildest decrease rate among all segments. Deducting “renter price” sales, this total of transactions was 3,300 apartments, a decrease of 31% compared to November 2021.
In an analysis of “first apartment” purchases in the free market, in the Rehovot area, among the most prominent purchases by young couples in the month of November (among other things, against the background of sales promotions by contractors in the area) it was found that, contrary to previous analyzes conducted by the Chief Economist’s Division among this segment, the prices of the apartments purchased in the month of November were low By a little (1.2%) of those purchased by this segment last March, before the start of the Bank of Israel interest rate hikes.
Decreases in the future as well
Preliminary data for the month of December also indicate a relatively low level of transactions. Compared to the previous month (November), which was affected by a lack of working days due to the Tishrei holidays, in December there was a 54% increase in the number of transactions. In terms of sales days (holiday branches, Friday-Saturday and election day) and in total there was a 5% decrease in the level of transactions. However, if you compare the December data to months that are not similar to November in terms of the number of working days in them, this is the lowest number of transactions since May 2020 (Corona outbreak).
Excluding government subsidy transactions, the number of transactions in the free market in November amounted to 7,200 units, a 58% decrease compared to November last year and the lowest level in the number of transactions in the free market since the outbreak of the Corona epidemic (excluding the holiday months).