For the first time since the outbreak of the crisis: an increase in private real estate transactions

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The chief economist at the Ministry of Finance published the industry review from June, which shows a sharp increase in the number of transactions. A 28 percent increase from June last year in sales to young couples

Walla! Business

Photography: Roni Kanfo, Editing: Nir Chen

The main points of the report

  • In June, for the first time since the outbreak of the Corona crisis, there was an increase in transactions in the real estate market compared to the same period last year, after three months in which sharp declines were recorded. Total transactions in June were 10.9 thousand, an increase of 16% compared to June last year. (Price per occupant) The total number of transactions in the free market was 9.1 thousand, an increase of 11% compared to the corresponding period last year.
  • Sales of new apartments in June reached a level of 4.2 thousand apartments, the highest monthly level since the beginning of the year. After deducting government-subsidized sales, the sales of contractors in the free market amounted to 2.5 thousand apartments, an increase of 26% compared to June last year, which is an exceptional increase of 100% in the sales of contractors in the BS area.
  • Investors’ purchases in June amounted to 1.2 thousand apartments, unchanged from June last year, after four consecutive months of sharp declines in these purchases. It should be noted that this is the only segment in the market where there was no increase in purchases in June. At the rate of total transactions, the weight of investors was only 11%, two percentage points lower than in June last year. In a geographical segmentation, it was found that precisely in the peripheral areas there was an increase in investor purchases, and even at a significant rate. It is possible that the lower price levels that characterize the peripheral areas “incentivize” purchases in these areas at a time when for a large proportion of households there was a decline in purchasing power.
  • Investor sales in June totaled 2.1 thousand apartments, an increase of 15% compared to June last year and the highest level in these sales since December 2018. It should be noted that this increase is twice as high as the growth rate recorded in total transactions in second-hand apartments. Investors’ inventory of apartments continued to decline in June and at a sharp rate, with about 900 apartments deducted from this “inventory” during the month, the highest level since January 2017. Since the “inventory” of apartments by investors began to decline in April 2016, it was deducted until last June About 25,000 apartments.
  • The purchases of young couples amounted to 5.8 thousand apartments in June, a sharp increase of 28% compared to June last year. After deducting purchases under the “price per occupant”, the purchases of young couples in the free market amounted to 4,000 apartments, an increase of 19% compared to June last year after four consecutive months of sharp declines.
  • The total number of dwellings sold as part of the “price per occupant” in June was 1.8 thousand dwellings, a sharp increase of 53% compared to June last year.

More from the report

The total number of transactions in second-hand apartments in June was 6.6 thousand apartments, an increase of 7% compared to June last year, after three months of sharp declines (each month compared to the same period last year). The increase in the sale of second-hand apartments occurs against the background of a sharp increase in investor sales. In a geographical segmentation, it was found that in the Hadera area, the number of transactions in second-hand apartments continued to fall sharply, while in the Tel Aviv, Central and Netanya areas, there was a relatively moderate decline. On the other hand, the Be’er Sheva and Rehovot areas stand out with growth rates of 31% and 18%, respectively.

Contractor sales in June recovered significantly and reached a level of 4.2 thousand apartments, the highest monthly level since the beginning of the year. After deducting government-subsidized sales (price per occupant), this number is reduced to 2.5 thousand apartments, an increase of 26% compared to June last year. It should be noted that about one hundred apartments were sold during the month to two RIT funds (“contributed” 5 percentage points to the increase in transactions).

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