Israelis less inclined to buy housing

The proportion of Israelis considering buying a home in the next six months fell in November for the second consecutive month.

By EREZ WOLLBERG
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 Israel.
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 financing.
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.