The Ministry of Finance published a weekly report of the chief economist on the state of the residential property market in August this year.
In accordance with this document, in August, only 8.3 thousand apartments were purchased - this is one of the lowest August indicators for the last decade. Stagnation in the property market, observed since the beginning of 2017, continues.
Compared to July 2017, the number of transactions decreased by 3%, compared to August of last year - by 13%. Decrease in the number of transactions in comparison with the previous year has been observed since February.
In August, it was purchased 2,4 thousand new apartments, which is 4% less than a month earlier, and 18% less than in August 2016. If you exclude apartments sold under the program "Price for a new settler" (Mehir le-Mishtaken), during the reporting period, 2,1 thousand new apartments were purchased, which is 7% more than in July of the current year (growth is due to sales in the Tel Aviv area) and 17% less than in August last year.
The volume of funds received by developers as a result of transactions for the sale of housing decreased by 4% in comparison with July of the current year and by 18% in comparison with August 2016. This trend has remained unchanged since May. And since April of this year, transactions for the sale of new apartments are accompanied by a decrease in the average price of an apartment.
The share of investors among purchasers of apartments continues to decrease: only 1.5 thousand apartments were purchased for investment purposes, which is 7% less than in July and 22% less than in August last year. It is noted that the decrease in the share of investors among purchasers also occurred after the verdict of BAGAC on the abolition of the law on the taxation of the third apartment.
The level of sales of apartments by investors in August fell by 6% compared with July of this year, slightly higher than the decrease in the number of sales of apartments from second-hand. In comparison with August last year, when information was published on the introduction of tax on a third and further apartment, it is a decrease of 24%. The chief economist of the Ministry of Finance believes that this measure was influenced by the decision of the BAGAC to cancel the tax.
3,9 thousand apartments were purchased by the buyers as their first dwelling, including 300 apartments in the framework of the program "Price for a new settler".
If we exclude preferential apartments, we are talking about a stable position in comparison with July and a moderate (by 3%) decrease in comparison with August of last year. The report details the geographic dispersion of apartments purchased by young families who do not have their own housing. So, in the Netanya area, in the free market, only 275 apartments were purchased, which is 22% less than in August last year.
This is due to the fact that in August in the Netanya area (in Pardesia), the sale of preferential apartments began as part of the Mehir-Mishtaken project, and young families preferred to wait for the rallies. Considering that the amount of discount for apartments for beneficiaries in Pardesia is one of the highest in the country, this decision of young families is not without grounds.
It is also noted that among the buyers of their first apartments in the Netanya area, many single people are under the age of 35 who do not fit the criteria of the program "Price for a New Home". From this, the chief economist concludes that the Israeli families who do not have their own apartments appreciated the advantages of the program of the Ministry of Finance and the Ministry of Construction and use the project "Price for a new settler" just as the Minister of Finance Moshe Kahlon had hoped: as a key tool for the acquisition of quality first housing at preferential rates prices, and leave apartments in the free market for those who do not qualify for the program.
In the Jerusalem area, 360 apartments were bought as the first housing, it is a growth of 13% compared to July and a decrease of 9% compared to August last year. At the same time, the average salary for the family among the buyers of their first apartments in Jerusalem was only 11.8 thousand shekels gross per month, and the median salary - only 10.5 thousand shekels a month.
The average cost of apartments purchased by young families in the Jerusalem area was 1.5 million shekels, that is, 130 average salaries per family. The chief economist points out that the source of financing apartments for such families remains questionable.
It is noted that in August, for the first time, sales of apartments began within the framework of the Mehir-le-Mishtaken project in Pardesia, and the average monthly salary for the families who purchased the apartments in these projects was significantly higher: NIS 21 thousand per month, the median salary for the family - 19 thousand shekels a month.
Such high incomes of families who did not have their own housing before the transaction, indicate that both spouses are working: there were 80% of such people. For comparison, among families who bought apartments in the Jerusalem area, both spouses work only in 53% of cases. The report indicates that the apartments in Pardesia will cost the families of beneficiaries who bought them in the framework of the project "The price for a new settler", only 56 salaries, on average.
