Israeli Housing Prices Drop 0.6% in July-August, Led by Northern and Central Regions
Translated & summarized from i24NEWS by baba
Israeli housing prices fell by 0.6% in July-August, with the Northern, Tel Aviv, and Central regions experiencing the largest monthly declines. Year-over-year, prices are down 1.8%, with the Central, Tel Aviv, and Southern districts showing the most significant drops. The Ministry of Finance reported a 23% decrease in apartment sales year-to-date and noted that August purchase levels were among the lowest since the early 2000s. The consumer price index saw a 0.5% decrease in September.
The story in 6 lines · by baba
- Israeli housing prices dropped 0.6% in July-August, marking a decline after two months of increases.
- The Northern, Tel Aviv, and Central districts led the monthly housing price decreases.
- Year-over-year, housing prices fell 1.8% by the end of August.
- Contractor sales, excluding subsidized housing, decreased by 2% year-over-year.
- August apartment purchases were among the lowest recorded since the early 2000s.
- The consumer price index decreased by 0.5% in September.
Housing prices in Israel experienced a 0.6% decrease in July-August compared to June, according to data released by the Central Bureau of Statistics (CBS). This monthly decline was primarily driven by sales in the Northern (1.5%), Tel Aviv (0.9%), and Central (0.7%) districts. Year-over-year, for July-August, prices fell by 1.8%, following two months of slight increases. The Central (2.7%), Tel Aviv (1.9%), and Southern (1.5%) districts saw the most significant annual price drops.
For new apartments specifically, the CBS reported a 0.4% price decrease compared to the same period last year. Over the past five years, new apartment prices have risen by 24.3%, while all apartment prices have increased by 26.8%.
In a broader economic context, the September consumer price index (CPI) dropped by 0.5% compared to September of the previous year, marking a 1.6% increase over the last 12 months. Notable price decreases were observed in culture and entertainment (2.7%), transportation (2.5%), clothing and footwear (0.9%), and food, furniture, and household equipment (0.4%). Conversely, prices rose for fresh vegetables (6.6%), education services (0.8%), and rent (0.4%). Rent prices for lease renewals increased by 2.4%, while new tenants saw a 5.3% rise, though these figures are approximations reflecting annual changes.
The input price index for residential construction rose by 0.1% in September, reaching 104.0 points, with a 2.8% increase since the start of the year. The index for construction input prices excluding labor costs also rose by 0.1%. Over the last 12 months, this index increased by 3.6%, driven by a 5.3% rise in labor costs. Material and product prices in construction increased by 0.2% in September, with iron and reinforcement mesh seeing notable rises, while plaster, stucco, and concrete prices decreased.
Separately, a review from the Ministry of Finance's Chief Economist's office indicated that contractor sales rose 6% year-over-year, but excluding government-subsidized apartments, there was a 2% decrease. The Southern region showed a significant 13% drop in sales compared to the previous August. Year-to-date, 2,304 apartments were sold, a 23% decrease from the same period last year. This follows findings of a high rate of transaction cancellations, particularly in the southern cities of Netivot, Sderot, and Ofakim. Overall apartment purchases in August were down 1% year-over-year and 2% from the previous month, reaching 7,532 units. Excluding subsidized sales, the decrease was 5% from the previous month. The Ministry of Finance noted these purchase levels are among the lowest recorded since the early 2000s, comparable only to periods of intifadas and social unrest. Investor purchases also declined by 2% year-over-year and 6% from the previous month.
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