Israel experiencing decrease in real estate purchases

i24NEWS

3 min read
Traffic on a highway in Tel Aviv, Israel, on January 20, 2022.
Tomer Neuberg/FLASH90Traffic on a highway in Tel Aviv, Israel, on January 20, 2022.

10,500 homes were sold in May, down 16 percent from the previous year

For the third month in a row, the rate of real estate purchases in Israel decreased, according to a report released Tuesday by the Ministry of Finance.

The report does not give any indication concerning the movement of prices, however, based on a newly published survey by the Central Bureau of Statistics (CBS) regarding consumer confidence, it revealed the lack of motivation of households to invest over the next year.

CBS is expected to release monthly housing numbers in the coming days.

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According to the Finance Ministry report, 10,500 homes were sold in May, down 16 percent from the previous year.

These include apartments sold as part of property lotteries at reduced prices, with 849 properties sold in May.

A second lottery is currently being organized and concerns some 5,500 additional units; it will end on July 17.

The first lottery attracted more than 100,000 people, with only 10,053 of them being the lucky winners.

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Buyers, first-time owners outside of lottery schemes, numbered 4,200, down just 5 percent from last year according to the report, which said such purchases appeared to be headed to outlying areas of the country.

According to the data, the housing market is also becoming less attractive to investors - households that already own a primary property in Israel - who face new purchase taxes on top of rising inflation.

1,900 units were acquired in May by investors – a 26 percent drop from the previous year - who sold 2,300 properties, reducing their market share to 18.5 percent. It is an overall reduction of 2.4 percent compared to May 2021, according to the report.

The main regions where the investor interest waned were Rehovot and Tel Aviv, according to the report. 

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