New taxes on foreign owners and Israelis who own multiple properties reduced the number of investment property purchases by 60 percent in 2015 compared to a year earlier – making the number of investment properties sold last year the lowest since 2003 – but that didn’t stop 2015 from being the biggest year in real estate ever. A total of 120,000 housing units – new and used – were purchased during the year, the Central Bureau of Statistics (CBS) said Monday. What’s more, November 2015 was the one of the biggest-ever single months for home sales in Israel, with 28 percent more homes sold that month than in November 2014.
Purchases of both new and second-hand apartments and homes climbed – 22 percent and 31 percent respectively – compared to a year before. A CBS analysis said that from the numbers it was clear that there was a great deal of pent-up demand among Israeli buyers, who fueled the demand all by themselves, with much less help from foreign investors, who have been accused of strong-arming the market and buying up available homes, contributing to Israel’s housing shortage by buying apartments and either keeping them empty or using them only on holidays and for vacations.
The reason the CBS knows this, the analysis said, is because much of the growth in sales was in areas outside the Tel Aviv and Yerushalayim metropolitan areas. Sales in the Hadera area jumped 60 percent in 2015 compared to a year earlier, while sales in Haifa and Teveriah jumped 38 percent. In Tel Aviv, meanwhile, sales increased only by 11 percent.
The key to the change in buying patterns was the implementation of an increased tax on the purchase of investment apartments in June 2015, the analysis said. Many of the second-hand apartments that were sold in the second half of the year were apparently apartments that had been purchased for investments, and rather than pay the increased tax, owners preferred to sell and cash out. That, however, had little impact on prices, which remain as high as ever in all parts of the country – and are likely to remain that way, the analysis said, as there is still far more demand than supply.