Finance Ministry: Housing prices post slight drop in April

Fourth month of year also saw decrease of 31% in purchases, says ministry survey.

June 13, 2011 22:42
2 minute read.
New Housing in J'lem's Har Homa

Housing Har 311. (photo credit: REUTERS)

New home prices fell in April as the real estate market cooled, the Finance Ministry said in its monthly survey of the economy, published Monday.

The median price of new homes dropped 0.8 percent in April compared to the previous month, the ministry said, adding that “prices fell in all districts, except for a 2.4% rise in Haifa, and in Beersheba, where prices were unchanged.”

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In addition, the ministry found that 30.6% fewer apartments were purchased in April than in March, thanks to a 35% drop in the purchase of new apartments and a 29% drop in the purchase of second-hand apartments. The fall was particularly noticeable in Tel Aviv, where 42% fewer apartments were purchased in April than in March.

The Red Lights survey, which covers all the major angles of the economy including the real estate market, foreign trade, the labor market and taxation, was released just ahead of the Central Bureau of Statistics publication of its own data on home prices on Wednesday.

For many months, the figures published by the Ministry of Finance and the Central Bureau of Statistics have flatly contradicted each other. Almost every month, the Ministry of Finance has reported that home prices fell, while the Central Bureau of Statistics has reported a steady rise in home prices for the past two years.

The survey also observed that exports dropped in dollar terms, reversing three consecutive months of increases. The drop was felt mainly in the areas of technology and incoming tourism, it said, while in the opposite direction there was a noticeable increase in imports, “so that the trade deficit widened to a record level.”

It added, “The growth in imports reflects, among other things, the increase in oil prices and growth in the import of export products. In addition to these developments, another re-evaluation was recorded in the value of the shekel in real terms.”

Other warning signs for the Israeli economy include the continuing stagnation of the US economy, the deepening of the debt crisis in the euro-zone and the continuing inflationary pressures in European countries, the ministry said.

“The IMF’s world growth forecasts, which were published this month, emphasize the division of the global economy between the developed countries, which are expected to see slow economic growth, and the developing economies which are expected to grow at a rapid rate.”

Globes contributed to this report.

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