Investors saw 16% decrease in housing transactions in May - Finance Min.

In a survey conducted by the Finance Ministry, data shows that the number of transactions of apartments sold as part of the price per occupant decreased by 14%.

 Finance Minister Avigdor Liberman (photo credit: NOAM MOSKOVITZ/KNESSET)
Finance Minister Avigdor Liberman
(photo credit: NOAM MOSKOVITZ/KNESSET)

Recently released data from a chief economist at the Finance Ministry survey indicates a moderation in the market, as the number of apartment sales — price per occupant — decreased by 14% and amounted to 9,600.

The share of investors in the housing market is on a decline. The shares of the investors stand at 18.5% of all transactions in May. 

Investors bought 1,900 apartments in May, a decrease of 26% compared to last year. This is due to the increase in the purchase tax on a second apartment, implemented by Finance Minister Avigdor Lieberman.

Not all bad news

Additional data show some moderation in the market. The number of transactions made in May decreased by 16% compared to last year and amounted to 10,500 apartments. Compared to April, which includes three massive religious holidays, this was an increase of 20%. 

 DEMONSTRATORS SET UP tents across from the Knesset, to protest soaring housing prices, last week. One of the signs reads: ‘We all deserve a home.’  (credit: YONATAN SINDEL/FLASH90) DEMONSTRATORS SET UP tents across from the Knesset, to protest soaring housing prices, last week. One of the signs reads: ‘We all deserve a home.’ (credit: YONATAN SINDEL/FLASH90)

Transactions other than apartment sales decreased by 14% and amounted to 9,600. The decline characterizes both newly-built apartments and apartments which were occupied and sold two or more times.

Contractors' sales fell by 16%, to 3,800 apartments. Second-hand apartment deals also fell by 16% to 6,700 apartments. 

What does it mean?

A worrying figure that emerges from the survey's data is an increase in the level of leverage in transactions among first-hand apartment buyers in periphery communities. The data shows an increase in leverage (higher financing of credit), a rise in housing prices, and a marked erosion in disposable income. 

Soon, the June consumer price index will be published which will indicate whether the decrease in the volume of transactions means that housing prices fell.