Hod Hasharon 311.
(photo credit: Courtesy)
Israel Real Estate has been a hot commodity
Statistics indicate the market is cooling off
For the last several years, Israel has enjoyed an appreciating Real Estate Market. Estimates as to the increase in property values over this “boom market” vary widely. The Bank of Israel just completed a survey which indicated that home prices rose 35 percent in real terms between December 2007 and August 2010. Other estimates of the price run-up are much higher. Many sellers benefited from these prices and investors played a huge role, with as much as 35% of the sales activity at one point coming from those who were buying apartments for investment. Most sources say that prices have continued to rise since August of 2010. Speaking of a “real estate bubble”, the researchers who issued their findings said there was no evidence of a bubble and if one is happening, it is in the early stages and not yet supported by data.
Contrary to the Bank of Israel survey, statistics just released by the Finance Ministry indicate that the market is starting to cool. According to the Treasury’s statistics, the number of real estate transactions in the country was down 14% in May of this year, compared to May of 2010. Additionally, the market share of those apartments bought for investment fell to 23% in May, down from 31.1% in May 2010. According to the Finance Ministry, preliminary data for June points to a level of sales that would be the lowest since June 2004. According to the second-hand home classified ads site, Homeless, asking prices for homes are coming down in certain areas. In June, prices fell for all types of apartments in three areas: Ramat Gan – Givatayim, Netanya and Jerusalem, according to Globes. Other factors that suggest this may be a “good time to buy”
A consumer confidence survey just completed by Globes in June, indicated that only 6.4% of Israeli adult respondents expressed an interest in buying an apartment in the next 3 months. The figure for June is the lowest figure for over a year and the number of people considering buying an apartment has fallen for three consecutive months. The survey found that Israelis have reached the limit of their financial capacity to pay for homes.
The strong performance of Israel’s economy combined with the poor performance in recent months of the dollar; definitely have to be taken in to consideration at this point in time. The dollar doesn’t appear to be ready for a rally and has lost approximately 8% against the shekel since February of this year.
All of the factors and statistics mentioned here make for an atmosphere that Buyers haven’t enjoyed for quite some time. For those in a position to buy an apartment at this time, you should find Sellers more negotiable than they have been for several years.
Happy house hunting! Lyle Plocher is the Director of Buy Property In Israel and can be reached by email at [email protected]