Tel Aviv Leads New Apartment Sales; Overall Market Sees July Dip

Tel Aviv, Kiryat Gat, and Haifa emerged as top sellers of new apartments between May and July, according to a Central Bureau of Statistics (CBS) review. In contrast, Jerusalem, Haifa, and Beersheba led the market for second-hand apartment sales during the same period. The review also indicated a decline in overall sales in July compared to May and June, returning to levels seen at the beginning of the year. The Chief Economist's office at the Ministry of Finance noted that July's sales figures were among the lowest recorded for the month since the turn of the century. However, this dip may be partly attributed to summer holidays and the " Bein HaMetzarim" period, which fell in July and August, potentially causing buyers to postpone transactions.

Tel Aviv was the most popular city for apartment purchases from May to July, with 1,730 units sold, two-thirds of which were new. Jerusalem ranked second with 1,412 apartments sold, one-third new. Haifa secured third place with 1,401 transactions, driven by new construction and urban renewal projects, with 37% being new apartments. Ashdod followed with 946 sales, and Petah Tikva with 840 sales.

July recorded approximately 7,600 transactions, a figure described as one of the lowest for the month since 2000. The Chief Economist suggested that summer breaks and "Bein HaMetzarim" might have caused delays. The CBS data shows a modest monthly increase in transactions since January, averaging 0.8%, primarily due to a 1.7% average monthly rise in new apartment sales. Conversely, second-hand apartment purchases have seen an average monthly decrease of 0.8% since April.

The decline in sales is largely attributed to "apartment upgraders" (those selling their current home to buy a larger one). In July, they purchased 2,040 apartments, an 18% drop from July 2023 and a 17% decrease from June. The Haifa region saw the most significant decline among upgraders, while the Shfela region and Tel Aviv experienced a slight increase. Overall, upgraders accounted for 29% of the market in the first seven months of the year, down from the usual third or more, suggesting a reluctance to move unless necessary. First-time buyers continue to dominate the market at 55%, with investors making up only 16%.

The supply of new, unsold apartments remained stable at the end of July, with 85,000 units available, a record high that presents a challenge for developers. Jerusalem leads in unsold inventory with 10,097 units, followed by Tel Aviv (9,725), Bat Yam (5,057), and Haifa (4,116).