Real Estate Sales Fall Again in August

YERUSHALAYIM -
Construction of new residential buildings in Ramat Beit Shemesh. (Lior Mizrahi/Flash90)

The recent trend that has seen real estate sales slow continued in August, the Finance Ministry said in its latest report on the Israeli real estate market. A total of 8,300 new and secondhand apartments were sold in August, 3-percent fewer than in July, and 13-percent fewer than in August 2016.

Of the numbers sold, 3,900 were purchased by Israeli families who sold another home and sought to upgrade to a larger apartment or better neighborhood. 3,000 apartments were sold as part of the Price Resident program, the government-backed program in which contractors sell apartments to qualified candidates – usually young couples – for a discount below the market value of the home. In return, the contractors get access to construction plots offered by the Israel Lands Authority for little or no cost, with the Price Resident homes part of an overall project where contractors sell the other homes they built for full price.

The balance of homes sold in August – about 1,500 – was bought by Israeli or foreign investors. One true sign that investments in real estate – which has been cited as one of the main reasons for the high cost of homes in Israel – has been leveling off is that purchases by investors remained more or less what they have been in recent months.

In August, the High Court nixed the Third Apartment Tax, which would have imposed a high purchase tax on Israelis who already owned two properties and sought to buy a third one. It was expected that the ruling by the Court would revive the real estate investment market, as buyers who had hesitated because of the Third Apartment Tax re-entered the market, but that development apparently did not come to pass.