January 27, 2023

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Home Sales in Israel Drop by 65% in October amidst Housing Crisis

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On Tuesday, the government published data, which showed that there was a massive decline of 65% in home sales in the month of October, as compared to the same month in 2021.

This is due to the fact that Israel has been undergoing a housing crisis that has resulted in soaring prices and a market slowdown.

Slowest month

The total number of housing units that were sold in the month of October 2022 was just 5,100, making it the lowest number of sales recorded in a month in the real estate market after 2020.

Back then, the entire country had come to a standstill because of the global COVID-19 pandemic that had resulted in lockdowns.

The numbers published by the Finance Ministry also showed that this month was the slowest October to have been recorded in over two decades.

Shira Greenberg, the chief economist of the ministry, also indicated that a similar pattern could be seen in the initial data for the month of November.

This means that sales have likely to have dropped in November of this year, as compared to the same month last year.

Localities

When the numbers were considered on the basis of localities, it showed that there had been a decline in home sales in every locality in Israel as compared to last year’s October, with the exception of Tiberias.

This is where there had actually been a 10% increase in the number of home sales. Tel Aviv, in particular, felt the extreme slowdown in home sales, as apartment purchases in the capital city dropped by 84%.

But, it should be noted that some of the reason for the 65% drop in home sales in October this year as opposed to last year is because of several successive Jewish holidays in which there is a slowdown in the market.

Furthermore, there had been more activity last year in October because of the announcement that there would be an increase in purchase tax from November.

The difference

The Jewish holiday period had taken place in September last year, but when data was compared with that of October 2022, home sales this year were still down by 36%.

In addition, the numbers also show a 36% drop as compared to numbers seen in September of this year. The rising house prices is another reason that explains the drop.

The Central Bureau of Statistics revealed that there had been a 19% rise in home prices between October 2021 and this year, which is the biggest increase since tracking began.

There had been a steady increase in prices since the second half of 2018, but their continuous increase has gone beyond expectations, even though demand has dropped and global housing markets do not show the same trend.

As for the sales in October, there were 4,700 sales in the free market, with 3,200 being second hand apartments, and the remaining homes were government subsidized.

This is the lowest number of sales for secondhand apartments in any October in 2 decades.

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