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Against the backdrop of investor turmoil, the real estate market is once again breaking sales records
The chief economist at the Ministry of Finance published the sales data of apartments in August, which jumped to a record high of years.
This is against the background of reports from the field that in recent days investors have been storming the market, before the tax intended to keep them away from it is updated.
An increase in transactions was also recorded in the periphery and not only in the demand areas
Tags
Real Estate
Apartments for investment
periphery
Chief Economist
Sonia Gorodisky
Tuesday, 02 November 2021, 12:33 Updated: 12:54
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The housing market is boiling: According to a survey by the chief economist at the Ministry of Finance, Shira Greenberg, 14.1 thousand apartments were purchased in August alone, the highest level since the historic record in June 2015. This is a 31% increase compared to August last year and an 8% increase compared to last July.
It should be noted that the level of transactions in August 2020 was high in itself against the background of a jump in investor purchases, after the purchase tax was lowered at the end of July that year.
The survey shows that investors bought about three thousand apartments in August, a sharp increase of 71% compared to August last year.
In doing so they continue to lead the increase in total transactions.
In the first eight months of the year, twenty thousand apartments were purchased by investors, more than the annual amount invested by investors in each of the last four years.
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Real Estate in Tel Aviv: Against the background of the investors' onslaught in recent days, it turns out that the month of August broke a record of years in buying apartments (Photo: Reuven Castro)
Investors are storming the market to get ahead of the tax hike
The review refers to August, but the onslaught of investors in the housing market is apparently breaking records in recent days:
Recall that earlier this week the government housing plan was presented whose main steps are the fight against investors in the housing market (buyers of second and more apartments).
According to the plan, the purchase tax for investors will rise from the level of 5% today to 8% probably already next week.
The law memorandum on the subject has already been published for public comment and the government hopes to pass it in "flash legislation" as early as next week.
This, among other things, is to prevent investors from invading the housing market in the period before the decision takes effect.
The draft law also revealed the tax levels - in the sale of a residential apartment, an purchase tax of 8% will apply to the part of the value up to NIS 5,348,565 and a purchase tax of 10% to the part of the value that exceeds this amount.
Chief Economist at the Ministry of Finance, Shira Greenberg (Photo: Finance Spokeswoman)
Change in the geographical mix: Investors have moved to buy a periphery
The survey also shows that the average price of apartments purchased by investors in August this year was only 5% higher than in August 2019, due to the fact that the rate of increase in apartment prices during this period was higher (about 12%). The Treasury explains this, among other things, by "changing the geographical mix of investor purchases to cheaper areas."
The sharp increase in investor acquisitions encompassed all areas, led by the Netanya area, which recorded a 107% increase compared to August last year. Growth rates significantly higher than the national average were also recorded in the BS and Tel Aviv areas - an increase of 87% in each of these areas.
Investor sales in August amounted to 2.8 thousand apartments, an increase of 27% compared to August last year and an increase of 8% compared to the previous month. Investors' inventory of apartments remained unchanged in August, after a total of 26,000 apartments were deducted from this "inventory" from April 2016 until the purchase tax was reduced at the end of July last year.
Purchases of "first apartment" in the free market amounted to 4.9 thousand apartments in August, an increase of 33% compared to August last year and an increase of 15% compared to the previous month.
Purchases of housing improvers amounted to 4.7 thousand apartments, an increase of 20% compared to August last year and a moderate increase of 2% compared to the previous month.
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