Treasury reports signs of a cooling down in housing market

Average prices of new homes fell 6.4% since the peak in December.

By KOBY YESHAYAHOU
SHIKUN & BINUI REAL ESTATE (photo credit: SHIKUN & BINUI REAL ESTATE)
SHIKUN & BINUI REAL ESTATE
(photo credit: SHIKUN & BINUI REAL ESTATE)
The Bank of Israel’s measures introduced over the past couple of months to cool the housing market are beginning to have an effect according to housing price figures published by the Finance Ministry on Tuesday.
In the third quarter of 2010, the average price of new apartments was 2.9 percent lower than in the second quarter, which was 2% lower than in the first quarter, the Treasury reported on Tuesday. The average price of a new home has fallen 6.4% from the peak reached in December 2009.
At the same time, there were fewer home sales in the third quarter compared with both the preceding quarter and the corresponding quarter of last year. New home purchases were down 19% in the third quarter compared with the corresponding quarter and home sales were 2% lower in the second quarter compared with the corresponding quarter.
In the third quarter of the year, 23,000 new and second- hand homes were sold in the third quarter, representing the lowest figure for the third quarter since 2006.
The drop in sales was nationwide, with the exception of Tiberias. The drop was double- digit in all regions, with the exception of Nazareth and the central region. Third quarter home sales were down 32% in Rehovot compared with the corresponding quarter, and were down 26% in Netanya.
More detailed analysis showed that 5,300 new homes were sold in the third quarter, 15.3% fewer than in the corresponding quarter.
During the same period, 17,500 second-hand homes were sold, the lowest number since the first quarter of 2009. Purchases of apartments for investments have also been falling since the fourth quarter of 2009. Third quarter purchases were down 28% compared with the corresponding quarter, and down 15% compared with the preceding quarter. Second quarter purchases were down 8% compared with the second quarter of 2009.