New home sales were down significantly in most parts of the country - including in the North - even before the war with Hizbullah, according to data published on Thursday.
Private-sector sales of newly constructed residential units fell an annualized 10.2 percent during the first six months of the year - or an average 0.9% per month - following an annualized 18.8% rise in the second half of 2005, the Central Bureau of Statistics said, citing trend data.
New housing sales fell 45% in the Jerusalem district, 37.7% in Judea and Samaria, 35.2% in the North, 11.8% in the South and 3.5% in the Haifa district in the first half of 2006 compared to the parallel period a year earlier.
In contrast, new housing sales jumped 68.3% in Tel Aviv and 11.2% in the Central district, more than making up for the drops in the rest of the country and bringing the national total to 9.1% above the number sold in the first half of 2005, although still down from the second half of last year.
In total, 6,824 new residential units produced by the private sector were sold during the first six months of 2006.
At the end of June, about 11,910 units remained on the market, of which 1,120 were finished and the remainder were still being built. Construction of the dwellings waiting for a buyer had been completed for an average of about 15 months.
The heads of leading construction companies suggested several effects the recent war in the north would have on the real estate market.
Heftziba Group chairman Boaz Yona predicted that prices in the North would take about six months to recover from the conflict "if an aggravation of the security situation does not recur."
Prices in the Center "rise naturally," he said, "with or without any added demand displaced from the North, but over the years, economic and security factors in combination could accelerate the process."
The market in Pardes Hanna-Karkur and in communities around Tel Aviv is expected to benefit from increased demand due to the war, but the rental market would continue to be centered on the Center in any event, Yona said.
ZMH Hammerman Group CEO Haim Feiglin said the war could encourage the "permanent trend" of migrating from Israel's underprivileged periphery to the Center, boosting the rental market as well.
Eldar Marketing CEO Amir Shaltiel said he expected real estate prices in the Haifa area to fall by about 5%, due more to a drop in morale than to the security situation itself. Haifa's status as one of the country's three most important cities would likely prevent any greater harm to the market, he said.
"Also when there were [terrorist] attacks in Tel Aviv, they did not lead to a drop in prices," even though overseas residents were put off from buying apartments in the city," Shaltiel said.