Israeli Housing Market Sees Mixed Trends: New Homes Rise, Used Homes Fall
Recent data from Israel's Central Bureau of Statistics (CBS) and the Ministry of Finance reveals a complex picture in the real estate market. While overall apartment sales show quarterly and bi-monthly growth, a notable divergence is emerging between new and used homes. For the second consecutive month, prices for new apartments have increased, contrasting with a downward trend in the prices of existing homes.
Despite a general rise in contractor sales across most cities, including Tel Aviv, some areas like Jerusalem are experiencing a decline compared to the previous quarter, defying expectations of a pre-summer surge. This slowdown in specific cities is occurring even as Israelis are taking out significantly larger mortgages, with some households dedicating over 40% of their income to loan repayments. This trend has led to a decrease in the average monthly mortgage payment in cities like Ramat Gan by 12%.
In other real estate news, a lawsuit seeking substantial compensation has been filed against developer Oded Shariki by 15 families alleging delayed apartment deliveries, marking the fourth such claim against his company. Separately, the state plans to market land for single-family homes in peripheral areas at a low cost, specifically targeting the Bedouin sector in the south with minimal land prices, aiming to make new villas more accessible.
Looking ahead, a senior official at the Ministry of Finance suggests that a recent decrease in interest rates might prompt a return of buyer demand, particularly from investors who were previously deterred. The CBS's decision to separate data for new and used homes aims to provide clearer insights into market dynamics, highlighting the ongoing rise in new construction prices and the fall in used home values. The market also faces challenges in the rental sector, with insufficient development of rental properties, pushing many to purchase in the open market.
