The Marker, Yael Drel, 11.02.2020
Nearly five years after Finance Minister Moshe Kahlon declared war on housing investors in public and succeeded in shrinking the real estate investors' market segment by more than 50% - investors seem to recognize price warming - and return to activity. Investors' purchases in December amounted to 1.5 thousand apartments - a 2% increase over the same period in 2018 - and that increase is mostly concentrated in the Tel Aviv area, that is to say, investors who made more expensive deals. Of 10% of investors' purchases in the rest of the country, and in the summary of the investor segment, their weight in total transactions in the housing market appears to remain 13%.
As far as the sale of apartments by investors is concerned, the survey shows that in December their sales amounted to 2,000 apartments - a decrease of 7% compared to December 2018. However, despite the decrease in investor sales, they continued to decline the inventory held by them, and according to the data in December this was subtracted. -500 apartments. Since the beginning of the fall, the "stock" of apartments by investors in April 2016 has been subtracted by the close of 22,000 apartments by the end of 2019.
In an annual summary, approximately 14,000 apartments were purchased for investment in 2019, similar to their level in 2018, following annual declines of 30% -20% in 2018-2016. The survey shows that the Tel Aviv area was among the few that recorded a significant increase in investor purchases in 2019 - a figure that was influenced, in part, by a large sales operation held by Gindi for apartment marketing in the Yad Eliyahu project.However, the chief economist at the Treasury notes that these figures are still significantly lower than the high levels that characterized this area at the beginning of the previous decade.
Regarding the purchase trends of the general public, the Treasury's survey shows that in December, 11,400 apartments (both new and second-hand apartments) were purchased in Israel - an increase of 6% compared to December last year. Excluding the sale of price-per-dwelling apartments, the number of free market transactions was 9,400, a moderate increase of 2% compared to December last year.
In 2019, an estimated 110,000 apartments were sold, 93,000 of which were in the free market. Compared to 2018, the number of transactions (including government subsidies) increased by 11%. Excluding transactions in government subsidy, the growth in transactions was reduced to only 4%.
The total number of new dwellings sold (including the price per dwelling) sold in December was 4.7 thousand, an increase of 26% compared to December 2018. The survey shows that the total number of dwellings sold under the price per dwelling last December was 1.9 thousand, an increase of 28% compared to December 2018, and that approximately 60% of these sales were concentrated in Beer Sheva and Jerusalem. For the first time, sales were made as part of a price to a resident of Kiryat Gat, in the Carmi Gat neighborhood - previously identified with investors. However, the Chief Economist's review noted that analyzing the characteristics of the buyers of the project indicates that the likelihood that these are investments is low. Also, there is an acceleration in investors' exit from the vineyards in the Karmi Gat area.
"In light of the same findings that emerged among first-time home buyers in 2015 in Karmei Gat, we examined the characteristics of this neighborhood's purchase price last December, based on their current residence and rent levels," the review said. The analysis of the findings shows that 73% of the purchases for the buyer in Kiryat Gat were made by residents of the Southern District. This is one of the highest rates of "local" purchasers found in previous analyzes conducted with respect to price per-buyer, including the periphery. On the other hand, residents of the Tel Aviv and Central districts together made up about one-fifth of all project buyers.Apparently, the residents of these districts who purchased an apartment in this project are "suspicious" of potential investors - that is, they do not intend to live in winepress vineyards. However, their pay levels analysis indicates relatively low pay levels. "
A similar growth in the volume of deals was also recorded in the sale of new apartments in the free market, largely because of a large sales operation in a residential project in Tel Aviv, which resulted in a 300% jump in the sale of new apartments in this area.
The young couples are leaving Tel Aviv
The one that continues to suffer from a weaker market is the second-hand apartment market segment: December 6,700 deals were made - a 5% decline compared to December 2018 and one of the lowest levels recorded in this market segment in December over the past decade.
The data also shows that while investors are returning to the Tel Aviv area, the free couples' purchases in December totaled approximately 4,000 housing units - a 2% decline compared to December 2018. In the geographical segment, the central region is noticeably declining in the free markets for the last four months of 2019 Acquisition of housing enhancers, on the other hand, improved in December to 3,900 housing units, an increase of 8% compared to the same period in 2018. This increase was largely influenced by a sharp 56% increase in purchases of housing enhancers in the Netanya area (against a similar increase recorded in the sale of new apartments in this area).
The number of "shelf-months" of dwellings sold by the housing enhancers - which preceded purchase of a dwelling before selling their former dwelling - remained at a high level of 20 months, a six-month long period compared to December last year.