"Until six months ago, I would receive 12 calls a day, today barely 1" (Photo: ShutterStock)
Until six months ago, Dana (pseudonym), a broker from the Sharon region, would receive 12 calls a day from potential buyers who wanted to buy second-hand apartments.
The deals were closed quickly, and whoever was not serious, she would move on to the next buyer.
Don't even bother to keep the phone.
Today, Dana receives between one and two calls only, and not necessarily to close a deal.
"In the Ir Yamim neighborhood in Netanya, there was a time when there were no five-room apartments for less than NIS 5 million," describes Tom Abgi, owner of the One Stop Home real estate agency in Netanya, "Today, the asking price for those apartments is NIS 4.2 million.
In the building opposite the Iir Yamim Mall, a five-room 135 square meter apartment with a balcony is being offered today for NIS 3.89 million. These are prices we have not encountered before."
What happened in the brokers' offices
illustrates the data of the Central Bureau of Statistics
published yesterday (15.1) and testify to the decline in housing prices, mainly in new apartments at a rate of 2.
This means: contractors are starting to lower prices, which ultimately also affects the prices of second-hand apartments, so sellers of second-hand apartments will have to adjust their prices to the new situation.
This means: contractors are starting to lower prices, which ultimately also affects the prices of second-hand apartments, so sellers of second-hand apartments will have to adjust their prices to the new situation.
The CBS data indicates price declines
The price drops, as shown by the LMS data, occur at the same time as a significant slowdown in the volume of transactions for the sale of new and second-hand apartments, as well as a sharp decrease of 59% in the volume of transactions made last November: 2,802 apartments compared to 7,094 apartments sold in the corresponding period last year
. The stock of unsold new apartments reached about 50,000 in November of this year - an increase of 9% per year, according to the report of the chief economist at the Ministry of Finance.
Furthermore, according to the Central Bureau of Statistics, in the segmentation of apartment price changes by district in the months of October-November 2022 compared to the months of September-October 2022, housing prices in Jerusalem increased by 2.4%, in the north prices decreased by 0.9%, Haifa increased by 1.9% , in the center decreased by 0.6%, in Tel Aviv they increased by 0.9% and in the settlements in the southern region housing prices decreased by 1.4%.
We note that despite the decrease in the volume of transactions and the decrease in the prices of new apartments, the prices of apartments continued to increase at a rate of 0.3%.
In a regional segmentation compared to the corresponding period, October-November 2022, compared to October-November 2021, price increases were recorded in all districts: North (21.7%), Center (21.0%), Haifa (20.1%), Tel Aviv (18.0%), South ( 16.3%) and Jerusalem (15.9%).
"Sooner or later, they will start lowering prices"
Eyal Rosenbaum, co-owner of the real estate agency Home In Israel, estimates that the prices of the new apartments may fall mainly in new projects that are now being marketed: "In the past year, every time there was a trend change in the construction input index, the real estate companies immediately adjusted the housing prices to the index. It went up by half a percent, they raised the apartment prices by half a percent, and they did the same with regard to the increase in interest rates. In recent months, we see that this conduct is pushing the buyers back. The increase in interest rates and housing prices at the same time caused the mortgage repayments to rise to NIS 5,000 a month, compared to approx. - 4,000 shekels, earlier."
Rosenbaum continues, "Today, we notice that the real estate companies are re-examining this policy, with some not raising the price at all and others lowering prices.
In the project I am marketing, the price drops were not reflected because the project is in an advanced stage and we have a few apartments left for sale.
On the other hand, contractors who get on the ground and are required to sell 10% of the apartments in the project, must enter into a sales rhythm of 4-6 apartments every month, and there in my opinion, sooner or later, they will start lowering prices.
We will probably notice this more in projects in peripheral areas, where the demand is lower."
Liat Daniel, from We mortgage and credit raising for projects, adds to Eyal's words, and claims that "it appears that a situation has arisen in which housing prices have decreased, but what is actually happening is that the demand is still high, taking into account, among other things, the rate of population growth and foreign demand, which raises concerns about taking out mortgages with high interest rates. Apart from that, we are currently noticing the phenomenon that the developers also avoid building because of the index costs, the construction inputs and the financing costs. If the downward trend in construction starts continues, a situation will arise again where demand will exceed supply, so that apartment prices will skyrocket again."
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