The Marker, Hadar Horesh, 27.10.2020

In August, there was an increase in the sale of apartments, according to data from a survey published by the chief economist at the Ministry of Finance, Shira Greenberg. The data show that 10,500 apartments were sold in August, a sharp increase of 23% compared to August last year - and an increase of 8% compared to the previous month. This is probably because of the reduction in purchase tax.

Contractors selling new apartments mainly benefited from the jump in sales. The contractors sold about 4,000 apartments in August, of which 1,500 in government subsidy programs (mostly price per occupant). This is a 25% increase compared to August last year. Sales of non-subsidized apartments rose at an even sharper rate - 45%.

The young couples contributed to the increase, apparently after many of them realized that price-per-tenant plans are not expected to return in the near future and the Ministry of Housing is paralyzed and has difficulty presenting an orderly plan - which should replace the previous policy.

The survey shows that the number of apartments purchased by young couples amounted to 5,300 apartments, of which 3,800 apartments were purchased on the free market. Overall, this is a 24% increase compared to August last year. In quantitative terms, this is 750 apartments more. This means that the contribution of young couples to growth in activity was the highest of all sectors.

The total number of second-hand apartment transactions in August was 6,500, an increase of 22% compared to August last year and an increase of 7% compared to the previous month. A geographical segmentation found that the increase in transactions included all areas, but it was particularly pronounced in the Hadera area (an increase of 50%) and in the Rehovot area (an increase of 36%). The most moderate growth rates were recorded in the Tel Aviv and Central areas (growth rates of 9% -8%)

The review also shows that August did not reflect the full picture of the market, as since the beginning of the year there has been a significant decline in sales of new apartments. In the first eight months of the year, 23,400 new apartments were sold (including price per occupant), a decrease of 7% compared to the same period last year. Contractor sales in the free market fell by 9%.

Meanwhile, the uncertainty caused high volatility in the housing market and sharp rises and falls in sales. "In the last four months (May-August) the number of transactions has risen and fallen intermittently at significant rates, an unusual phenomenon in the local real estate market (no similar phenomenon has been observed in the last 20 years) and suggests the high market uncertainty," the monthly review said. Of Gerenberg.

Much of the volatility in the market is not due to "uncertainty", but to the imposition of closures that restrict customer movement and paralyze apartment sales, while the period after the closure is characterized by a jump in deferred activity.

Another factor in volatility is the activity of investors in apartments, who waited until June and July for the expected expected reduction in investors. With the tax reduction at the end of July, real estate investors purchased an unusual number of 1,600 apartments and contributed to the general jump. Their volume of activity increased by 55% compared to August last year - and by 87% compared to the previous month. This trend also indicates that there is no certainty that raising the tax on investors has significantly contributed to a decrease in their market share and a reduction in demand for apartments.