New-home purchases for investment at 3-year low

Purchases of apartments for investment in Tel Aviv and the central region fell to their lowest level since the fourth quarter of 2003.

By GLOBES / KOBY YESHAYAHOU
Apartment in Tel Aviv 311 (photo credit: Courtesy)
Apartment in Tel Aviv 311
(photo credit: Courtesy)
New-home sales totaled 21,900 in the second quarter of 2011, 16 percent fewer than in the preceding quarter and the corresponding quarter of 2010, the Finance Ministry reported in its monthly Red Lights report.
Some 5,100 apartments were bought for investment during the second quarter, 24% fewer than in the preceding quarter and 34% fewer than in the corresponding quarter, or the lowest number since the fourth quarter of 2008 following collapse of Lehman Brothers.
Purchases of apartments for investment in Tel Aviv and the central region fell to their lowest level since the fourth quarter of 2003.
Purchases of homes by people buying bigger apartments fell for the first time since the third quarter of 2010, to 4,800 apartments in the second quarter, the lowest number since the fourth quarter of 2008.
New-home sales in the central region fell for the third consecutive quarter.
Haifa was the only region where new-home sales rose in the second quarter.
The average price for a new apartment was 2.9% lower in the second quarter than in the preceding quarter.
The biggest declines were in Jerusalem and the Sharon region, down 6%, followed by a 4% drop in the central region. The average newapartment price in Tel Aviv fell 0.5%. Haifa bucked the trend, with a 1% rise in the average price of a new apartment.
Second-hand home sales totaled 17,100 in the second quarter, down 12% from the preceding quarter and down 17% from the corresponding quarter. Second-hand home sales were 9% lower in the fourth quarter than in the fourth quarter of 2010.
Foreigners bought 830 apartments in each of the first and second quarters, 34% fewer than the average rate of 1,250 apartments per quarter in 2005-07. Foreigners have bought 33,600 apartments since 2002, or 4% of total sales.
Jerusalem saw the largest drop in apartment purchases by foreigners, with 35% fewer purchases in the second quarter than in the preceding quarter and 6% fewer than in the corresponding quarter. Purchases were down almost 50% from the peak quarter in 2006. However, apartment purchases by foreigners were 22% higher in Tel Aviv in the second quarter than in the preceding quarter and 76% higher than in the corresponding quarter.