(photo credit: Uriel Messa)
Sales of new homes dropped during December, while the number of purchases of investment apartments increased ahead of January’s increase in the purchase tax, the Finance Ministry said Wednesday in a report on the property market.
“The fall in sales of new homes during the month of December, compared with the previous month, was registered across all areas apart from Rehovot,” the report said. “The rate of decline ranged from 10 percent in the Sharon region to 48% in the Tel Aviv area.”
Overall, the number of transactions in the housing market fell 7% in December compared to November.
The number of second homes that were bought dropped 11%, while the number of new homes sold, not including Rehovot, plunged 23%.
The number of property purchases in December declined 6.7% compared to November; but rose 7.3% compared to December 2009.
The median price of new homes in December was 0.6% lower compared to November and 7.4% lower than in December 2009.
Prices of new apartments last year were 3.5% higher on average than in 2009.
The report was based on data received from transactions registered with the Israel Tax Authority.
The purchase of residential apartments fell 10%, while the number of purchases of investment apartments rose 2%, the report said.
“An analysis of the figures showed that the increase in the acquisition of apartments by investors last month was due to an announcement made at the start of December to raise the purchase tax on investment apartments,” the Finance Ministry said in the report.
“The weight of investors in the real-estate market increased significantly during the month of December, representing close to a third of all transactions – similar to the peak level registered in the third quarter of 2009 – after almost continuously declining since the last quarter of 2009.”
“Looking ahead, we expect a sharp fall in the number of purchases of
apartments for investment in the first months of 2011,” the Finance
Over the past year, real estate prices have risen 18%, and by more than
35% over the past two years, according to the Bank of Israel and the
Central Bureau of Statistics.
In an effort to accelerate the sale of apartments and boost supply, the
Finance Ministry last month announced it would raise the purchase tax on
investment apartments, meaning a second or third apartment.
It decided to cancel the capital-gains tax on apartment sales for
sellers of a second and third investment apartment for a period of two