arnstein house 298 88.
(photo credit: courtesy of Arnstein family)
Although there are critics of the government’s hesitant steps to restrain home
prices, they are showing to have an effect on the proportion of Israelis who are
considering buying a home over the coming six months, according to the Israel
Consumer Confidence Index, compiled by Globes Research and PwC
The Index showed that the proportion of Israelis considering
buying a home in the next six months fell in November for the second consecutive
month. The number of respondents who said that they were considering buying a
home in the next six months fell by 9 percent in November to 9.1% – the lowest
level since July, and the first time in recent months that the proportion has
fallen below 10%. In general, July is the baseline for most variables covered by
the current Consumer Confidence Index. July, as November, was characterized by
the introduction of measures by the government and the Bank of Israel to
restrain the housing market, such as tighter restrictions on mortgage
The three-month moving average of the willingness to buy a
home also fell, although it was still above 10% in November. The public’s
caution is reflected in every measure examined, including the willingness to buy
both new and second-hand homes.
For the first time since April, the
public’s willingness to buy a new home plummeted 38.5% in November, suggesting
that prices have reached such a level that even the rich are foregoing the
purchase of an apartment for now. The number of respondents sitting on the fence
about buying a home nearly doubled to 4.8%, an all-time high. A similar
proportion of fence-sitters was recorded in 2006, when the proportion of the
public considering buying a home was significantly lower.
This week, the
Central Bureau of Statistics reported 9,027 housing starts in the third quarter
of 2010, fewer than in both the preceding quarter and the corresponding quarter
of last year. A comparison of housing starts with the moving average of the
willingness to buy a home indicates a direct correlation through the first half
of the year, although it should be noted that housing starts data is published
after a lag and only once every quarter.