Treasury: New flat prices fall 11% in July
Finance Ministry figures point to 29% increase in apartment sales compared to summer of 2011, imbalance in sales for different parts of country
Israelis stormed the housing market in the summer of 2012, Finance Ministry figures obtained by Ynet confirm.
According to a monthly review authored by the State Revenue Administration, "Some 10,300 apartments were purchased in July – the highest level of transactions conducted in the month of July since the beginning of the previous decade (the earlier figures available to us)."
According to the review, July 2012 was a particularly hot month for Israel's housing market. The level of sales was 19% higher than in June 2012 and 29% higher than in July 2011.
State Revenue Administration researchers note that the initial figures for the month of August point to a moderate drop in the number of transactions compared to July, but to an increase compared to August 2011.
What led to the significant growth in sales? Was it the result of a rise in demands after months of waiting for prices to drop, or did prices actually fall – making a purchase more worthwhile?
The Treasury figures point to a downward trend in prices in the housing market, which may explain the increase in the number of transactions. The median price of a new apartment fell 0.6% in July – the third consecutive monthly drop in the prices of new apartments.
Sharp rise in demand in Shfela district
The median price of a new flat in July 2012 was 11.5% lower than in July 2011, when the social protest broke out and brought the period of extreme price hikes in the housing market to an end.
In addition, the figures for July 2012 were deeply affected by a sharp rise in demands in only one district – the Shfela in south-central Israel, where the number of transactions increased by 13% compared to July 2011 and 63% compared to June 2012. According to the review, this was the result of "extensive sales in one of the communities in the area."
The Shfela district was also the only one to record a price hike in July 2012, by a mere 0.3%. Prices remained stable in the Haifa and Jerusalem districts, while in Tel Aviv prices dropped by 0.9% and in the Sharon region and southern Israel they fell 1.6-2%.
It should be noted that not all government officials agree with the picture presented by the Finance Ministry, which points to a consistent drop in apartment prices since July 2011.
Data released last month by the chief government assessor at the Justice Ministry pointed to a 2% rise in apartment prices between the first and second quarters of 2012.
In addition, the Bank of Israel's recent interest rate discussions referred to a 1.2% increase in apartment prices in 2012. According to figures presented by the Central Bureau of Statistics, the average price of a 3.5-4 room apartment dropped by 0.1% in the first quarter and increased by 0.9% in the second quarter.
