Only 5,100 apartments have been sold this month, and the Treasury defines the drop in sales compared to October 2021 as “abnormal”. Although this year October included the Tishrei holiday, even compared to September last year, which also included the holiday period, there was a significant drop in apartment sales. In total, this is one of the lowest figures in the last 20 years
The housing market downtrend continues, with last October at a significant low: data released today (Tuesday) by the Department of Finance’s Chief Economist, Shira Greenberg, suggests that this month saw the lowest level in the number of transactions for the sale of apartments (new and used) since April 2020, which was overshadowed by the outbreak of the Corona epidemic.
Preliminary data for the month of November indicates a continuation of the sharp decline in transactions compared to the corresponding period last year (and a relatively low level in general compared to the months of November in previous years).
According to the data, the total number of apartments purchased was just 5,100 apartments – down by an unusual 65% from October last year and down 36% from the previous month. (september). It should be noted that October this year included the Tishrei holiday, but this is a small amount even compared to the trading volume in September 2021, which was also a month that included the holiday, in which 8,000 apartments were sold – also a decrease of around 36%.
The Treasury explains that the sharp drop compared to October 2021 is partly explained by a high level of transactions, as real estate investors anticipated purchases before the increase in the purchase tax which came into force at the end of November 2021, as well as due to the fact that all Tishri festivals fell last year on September. However, when looking at the level of transactions in October of this year compared to those that preceded it over the past 20 years, we find that this is one of the lowest levels in this comparison.
Excluding government grant transactions, the number of open market transactions in October this year amounted to 4,700 apartments sold – also a 65% drop from October last year and a 36% drop compared to the previous month.
With regard to second-hand apartment sales transactions only, the data shows that the lowest level was recorded in this market segment last October, compared to the months of October in the last 20 years, after the sale of 3,200 apartments – a drop of 64%. compared to October last year and a decrease of 37% compared to the previous month. In a geographical segmentation, it was found that the sharp drop encompassed all areas equally at a rate of between 60% and 70%.
With regard to new apartments sold by contractors, the data also shows that in October these sales represented only 1,900 apartments – a drop of 66% compared to October last year and a drop of 35% compared to compared to the previous month. Also in this market segment, this is the lowest level of contractor sales since April 2020, in the shadow of the corona virus outbreak. Deducting sales as part of the per capita price, contractors’ open market sales in October totaled 1,500 apartments – also a 66% drop from October last year and a 35% drop from compared to the previous month.
Tel Aviv. Decline in apartment sales by entrepreneurs
Tel Aviv. Decline in sales of apartments by entrepreneurs (Photo: Yaron Brener)
The Treasury also notes that in October this year there was a higher proportion of households in which at least one of the heads of household is employed in the high-tech industry. Thus, while last October this rate was 17.8%, in October of this year they concentrated 23.2% of the total of these purchases.
In the analysis of the sales of entrepreneurs in the open market according to the expected period of time to receive the apartment (relative to the date of signing the contract), it was found that in the month of October the high level of apartments sold “on paper” continued, while this rate was 70% of all apartments sold by contractors on the open market, similar to this level the previous month. This rate is the highest since at least the beginning of 2020. Compared to October last year, this is an increase of 14 percentage points
