The great majority of the transactions took place in the new apartment market/ShutterStock
Is it time to get off the fence?
The real estate review published today (Tuesday) by the Chief Economist Division of the Treasury shows a significant recovery in the number of transactions registered in January, and in particular in the market segment of new apartments.
According to the review, the total number of transactions (new and second hand) was 8,053, an increase of 14% compared to to January of last year. It should be noted that for the first time since March 2022, a month before the Bank of Israel began to raise interest rates in the economy, an increase in the number of transactions was recorded compared to the corresponding month of the previous year. Compared to December 2023, a sharp increase of 32% was recorded in the number of transactions.
Excluding government subsidy sales, there was The number of transactions on the free market in January was 7,072 apartments, an increase of 8% compared to January last year and the highest level since November 2022.
The contractors' promotions are working: a sharp increase in the new apartment market
The surprising jump in the ranking was achieved mainly against the background of a sharp increase in the sale of new apartments, when it is the second highest month of January since the beginning of the 2000s in this market segment.
In January, there were 3,716 apartments, including government subsidized apartments, a sharp increase of 46% compared to January last year and the highest level of contractor sales since May 2022. Compared to December 23, this is an increase of 34%.
Deducting government subsidy sales, contractor sales on the free market totaled 2,735 apartments, a 36% increase compared to January last year and a 23% increase compared to the previous month.
It is likely that significant sales promotions by the contractors, which began in 2023 and continued last January, focusing on favorable financing conditions for buyers, contributed to the considerable recovery in this market segment.
In addition, it can be assumed that the buyers' preference for apartments with MMD contributed on the one hand to an increase in the purchase of new apartments and on the other hand to the continued shuffling in the sale of second-hand apartments.
Sale of new apartments on the free market in January 2024, by regions/Chief Economist Division at the Treasury
In a geographic segmentation of the contractors' sales in the free market compared to January of last year, it was found that in eight out of ten regions a sharp increase in sales was recorded, while the Haifa and Hadra regions recorded decreases (at rates of 13% and 6%, respectively).
Regarding Hadera, the report states that this area stands out for its weakness in sales over a long period of time, beyond that recorded at the national level.
The increase in contractor sales in January was led by the central region with a sharp increase of 62%, and with the highest level of these sales in this region since May 22. Similar growth rates were also recorded in the Rehovot and Jerusalem areas.
Regarding the Rehovot area, it should be noted that this increase in sales was achieved after in the previous months this area stood out for a sharp decrease in sales, beyond that recorded at the national level.
Also, this area is notable for a sharp increase in the concentration of contractor sales in the free market, a finding that suggests significant sales operations by a number of contractors, particularly prominent in Ashdod (this city concentrated about a third of all contractor sales in the region).
The highest level of sales was recorded in the BS region, with 463 new apartments sold on the free market, an increase of 51% compared to January of last year. This is also the highest level of these sales in this region since March 23. We also note that the most dominant city in sales in this region was Netivot .
A 40% increase in the purchase of young couples
The purchases of the young couples in January amounted to 4,705 apartments, a sharp increase of 40% compared to January last year, as well as compared to the previous December.
Excluding government subsidized sales, the purchases of young couples on the free market amounted to 3,724 apartments, a sharp increase of 31% compared to January of last year, this after consecutive decreases in these purchases since April 2022, when the Bank of Israel began raising interest rates in the economy.
This is also the highest level of these purchases since June 2022. Also, this is the only segment that recorded an increase in transactions in January.
In a geographical segmentation of the purchases of young couples in the free market, it was found that in all regions there was an increase in these purchases, with the Rehovot region particularly notable where an abnormal growth rate of 92% was recorded compared to January of last year, this after sharp declines in the previous months.
The total number of apartments purchased by the young couples on the free market in this area in January was 602 apartments, the second highest level (after the Haifa area) and the highest level recorded in these purchases in this area since March 22, a month before the beginning of the sequence of interest rate increases by the Bank of Israel.
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