Average home prices down 3.3%

House prices lower in second half of 2011 compared with first half, after rising 5.3% in first six months, Geocartography Knowledge says.

By ORI CHUDY/GLOBES
Hanavi Street 311 (photo credit: www.sucasatlv.com)
Hanavi Street 311
(photo credit: www.sucasatlv.com)
"The average home price was 3.3 percent lower in the second half of 2011 compared with the first half, after rising 5.3% in the first half," says Geocartography Knowledge. "The policies of the Finance Ministry and Ministry of Housing and Construction succeeded in stopping, and even slightly reversing the rise in the average home price in Israel. Prices for apartments with strong demand rose by just 2% in 2011, after rising 9% in 2010."
Geocartography CEO Rina Degani attributed the drop in the average apartment price to a fall in prices for high-end apartments, costing more than NIS 2 million, while prices for apartments costing less than NIS 1.5 million continued to rise. "Although prices for high-end apartments fell by just 1.5%, their high price caused the average home price to fall by 3.3%."
Home prices fell in high-demand areas where expensive apartments are found, such as Tel Aviv and the Sharon. "Prices in these areas fell by 3.2-4.2% in the second half, or 0.5-07% per month," says Geocartography. Home prices in the second half were lower in the first half throughout the country, except for the Haifa and Northern districts, where they rose by 2%. The average apartment price fell by 1.1% in Jerusalem and by 0.1% in the Southern District.
Degani concluded, "The halt in home sales and the expected drop in prices affects many businesses, including lawyers, assessors, brokers, advertisers, furniture and housewares retailers."
"It is hard to predict what will happen over the coming year, in view of expectations of lower prices, but demand exists, and the housing shortage requires a solution. I do not expect home prices to plummet, unless the public's economic situation is harmed and unemployment rises," Degani added.