A comprehensive examination of Madlan indicates: The market has maintained stability, and sometimes even increased.
The black predictions came true
Tel Aviv.
50% decrease in transactions
Photography:
Envato Elements
Produced by the Department of Special Supplements
2020 was an unpredictable year in almost every area of our lives: nearly 2 million people lost their lives, the routine of life of the remaining billions changed from end to end, almost entire industries were wiped out.
Still, there are things that have remained more or less the same - such as the prices of residential real estate in Israel.
A special study conducted by the madlan website shows that even in 2020, the most unusual year we experienced in the last century, residential real estate prices in Israel remained stable, and in quite a few places continued to rise. The Israeli real estate market has also proven that a global health and economic crisis is not successful. Get him out of balance.
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"While at the beginning of the crisis there was concern that the Corona would shake up the residential real estate market, as of the end of 2020 it is clear that this forecast has been falsified," says Tal Kopel, Madlan's deputy CEO.
"Although housing prices in many cities have stopped rising, the national average is almost unchanged from 2019 - but a close examination of the major cities in the various provinces shows a mixed picture, and shows that the situation in the area is very far from the black forecasts of the crisis.
"However, it is important to remember that the sharp decline in sales in almost every city examined, and the decline in construction that may or may not follow, may further greatly affect housing prices in the coming years - if supply does not meet demand."
no change
The weighted average price for a new apartment in the State of Israel was NIS 1.837 million in 2019, while in 2020 it was NIS 1.834 million - stagnation.
The weighted average price of a second-hand apartment was NIS 1.467 million in 2019, while in 2020 it was NIS 1.465 million - a stagnation here as well.
How can this be explained?
The first reason is a change in tastes: the Corona crisis did not succeed in actually hurting the demand for housing, but on the contrary - people stayed longer and more significantly at home and realized that they had to improve or change their living conditions.
As a result, there has been a change in the type of apartments in demand - but not in the demand itself.
"The Corona crisis has preyed on the cards for residential real estate, but has also shown that there are unchanging paradigms, such as housing prices in the Tel Aviv district that have managed to beat it as well," says real estate appraiser and urban economist Ronen Rosenthal. Overlooking green areas or the sea, have become a more sought-after product.
These apartments allow for a high quality of life, especially in light of the understanding that working remotely, which does not require spending several hours in traffic jams, is the main change that is going to plague the employment market in the coming years. "
The second reason for stability and even a rise in prices is that the corona crisis brought real estate investors back to market. According to data from the Chief Economist at the Ministry of Finance, only in September there was an 83% increase in investor purchases compared to the same period last year - probably due to lower taxes on investment apartments. The geopolitical changes and the regulation of relations with many countries are expected to attract foreign investors to the real estate market in Israel as well, seeking a relatively safe haven for their money - and it is worth remembering that some do not lack money to invest.
How did we check?
Madlan experts examined prices in the two leading sales cities in each district in Israel: Ashkelon and Beer Sheva in the south, Rishon Lezion and Petah Tikva in the center, Nahariya and Afula in the north, Haifa and Hadera in the Haifa district, Jerusalem and Beit Shemesh in the Jerusalem and Tel Aviv-Yafo districts and Ramat Gan in the Tel Aviv district.
The type of apartments examined is the most common in terms of transactions: typical 3-room apartments second-hand, and typical 4-room apartments (without garden apartments) in the news.
Price per occupant apartments, which distort the results, were not taken into account.
It is important to remember that the full data for 2020 have not yet been reported and published by the Tax Authority, as there is usually a delay of about two months from the making of the transaction until it is published on the Tax Authority website.
However, there are already good enough indicators for the November-December data today, so the test is reliable enough.
Tel Aviv Jaffa
Change in number of transactions: 49.7% -
Change in the number of transactions in second-hand apartments: 59.1% -
Change in the number of transactions in new dwellings: 31.3% -
Change in the price of second-hand apartments: 1.08% -
Price change for new apartments: 7.06%
It seems that Tel Aviv is showing a mixed and extreme trend: while the prices of second-hand apartments remained stable, the prices of new apartments rose sharply and jumped by 7% in 2020 compared to 2019. In practice, things are not so simple in Israel's real estate capital.
Tel Aviv is characterized by an extreme difference in price levels between the various neighborhoods, so the average price in the entire city is greatly affected by the mix of deals and the scope in the various neighborhoods.
While in 2019 most transactions in the new apartments were made in Yad Eliyahu and Kfar Shalem, which are relatively cheap neighborhoods, in 2020 most transactions in new apartments were made in the old north, in Yad Eliyahu and Nahalat Yitzhak - neighborhoods where prices are higher.
Therefore, if we look at prices in homogeneous neighborhoods we will find a much different and moderate trend.
If we look at the old and new northern neighborhoods, for example, we will find that in 2020 the price of a second-hand apartment (3 rooms) increased by 2.4%, while the price of a new apartment (4 rooms) increased by 2.3%.
Ramat Gan
Change in the number of transactions: 35.6% -
Change in the number of transactions in second-hand apartments: 36.5% -
Change in the number of transactions in new dwellings: 34.8% -
Change in the price of second-hand apartments: 2.89%
Change in the price of new apartments: 1.98%
Ramat Gan is a much more homogeneous city than Tel Aviv in terms of prices, so it presents more moderate data: the prices of new apartments in 2020 rose by about 2%, and second-hand apartments by about 2.9%.
If we look at local projects in the renewed Haruzim neighborhood, for example, which enjoys proximity to Tel Aviv and Hayarkon Park, it seems that in the Assaf 29 project, a 3-room apartment was sold in June 2020 for NIS 34.4 thousand per square meter, while in the same period last year an identical apartment was sold for NIS 33.6 thousand per square meter. - An increase of about 2.4%, slightly more than the municipal average in a neighborhood that is considered prestigious.
Second-hand apartments also enjoy a nice price increase, due to the increasing difficulty in setting up projects, in a city that has previously led the field of urban renewal.
Jerusalem
Change in number of transactions: 39.8% -
Change in the number of transactions in second-hand apartments: 40% -
Change in the number of transactions in new apartments: 39% -
Change in the price of second-hand apartments: 2.02%
Change in the price of new apartments: 3.4%
According to data from the Population Authority, the capital of Israel has only recently crossed the million mark - almost twice as much as Tel Aviv.
Jerusalem continues to show a steady increase in population, which translates directly into increases in demand for housing, and then also to price increases: prices of second-hand apartments in the city rose by 2020 by about 2%, while prices for new apartments rose by 3.4%.
Jerusalem, like Tel Aviv, also shows great variability in price levels between neighborhoods, but unlike Tel Aviv - where the trend between neighborhoods is very mixed - in all the neighborhoods examined in Jerusalem there was an increase in rates similar to the urban average.
Beit Shemesh
Change in the number of transactions: 41.9% -
Change in the number of transactions in second-hand apartments: 39.7% -
Change in the number of transactions in new dwellings: 42.5% -
Change in the price of second-hand apartments: 0%
Price change for new apartments: 0%
Beit Shemesh is the rising star of the sale of new apartments in Israel.
In 2019, the city led the sales table with thousands of new units entering the market, and in 2020 it is second only to Ashkelon.
It seems that it is not for nothing that the municipality of Beit Shemesh has signed a roof agreement under which about 17,000 new apartments will be built in the city.
This fact has a significant effect on prices, and in the period examined Beit Shemesh (similar to plowing in 2019) shows a stagnation in prices, both in second-hand apartments and in new apartments.
Beer Sheva
Change in number of transactions: 30.5% -
Change in the number of transactions in second-hand apartments: 27.4% -
Change in the number of transactions in new apartments: 37% -
Change in the price of second-hand apartments: 0.86% -
Change in the price of new apartments: 4.24%
The capital of the Negev, one of the largest cities in the country, shows a fairly mixed trend.
Although the prices of second-hand apartments in the city fell sharply with the start of the corona, the reduction in the tax on investors did its thing and in an annual summary, prices fell by only 0.9%.
The prices of new apartments in the city show a significant increase in 2020, but an individual examination shows that here too there is great variability between the neighborhoods: while in the older neighborhoods, such as Neighborhood C and Neighborhood D, there were relatively moderate increases of only 1.5% -2%. In newer neighborhoods, such as Kiryat Ganim and Ramot - has led to much higher price increases in these neighborhoods and as a result also in the urban average.
Ashkelon
Change in number of transactions: 20.9%
Change in the number of transactions in second-hand apartments: 20.6% -
Change in the number of transactions in new apartments: 80.2%
Change in the price of second-hand apartments: 1.52% -
Price change for new apartments: 0.74%
With massive construction of new neighborhoods, Ashkelon is one of the fastest growing cities in the State of Israel, and in 2020 it also holds the title of the highest sales of new apartments.
In terms of prices, the trend in Ashkelon is very mixed: new apartments hardly changed their price during the year, and second-hand apartment prices fell by 1.5%.
It is possible that the large volume of supply of new apartments, in parallel with the construction boom, is doing its part and leading to a change in preferences - so that the demand for new apartments reduces the demand for old apartments in the city.
Haifa
Change in number of transactions: 41.1% -
Change in the number of transactions in second-hand apartments: 39.6% -
Change in the number of transactions in new dwellings: 47.1% -
Change in the price of second-hand apartments: 0%
Change in the price of new apartments: 2.34% -
The Northern Metropolis, the third largest city in Israel, introduced a mixed price trend in 2020.
While the prices of new apartments in neighborhoods such as Kiryat Eliezer and Kiryat Haim fell by about 3.5%, the prices of apartments in sought-after neighborhoods such as Carmelia and Ahuza rose by the same rate.
Most of the transactions were made in neighborhoods that showed a decline in prices during the period under review - which neutralized the neighborhoods characterized by an increase and drew the urban average down.
On the other hand, second-hand apartment prices managed to escape a decline and showed a stagnation in the place.
This may be due to the relatively new investment of the Haifa Municipality in the old neighborhoods, which includes, for example, ideas for accessibility, such as the installation of escalators that will make it easier to walk in them.
Hadera
Change in number of transactions: 35.2% -
Change in the number of transactions in second-hand apartments: 29.6% -
Change in the number of transactions in new dwellings: 46.3% -
Change in the price of second-hand apartments: 2.33%
Price change for new apartments: 2.08%
In 2020, Hadera is in second place in the second-hand rise in apartment prices in the city (2.33%), second only to Petah Tikva.
However, the prices of new apartments in the city also showed a fairly similar increase.
The reasons for this are varied, and include the great development momentum that the city is experiencing, which includes the construction of new neighborhoods, investment in urban infrastructure and improved transportation infrastructure for the city (Route 9, approximation of Ayalon lanes).
It is also possible that precisely in light of the Corona crisis, the city - which relies on employment in the center or in Haifa - manages to be an ideal solution for those looking for larger and sometimes newer apartments without moving too far from the workplace, and at lower prices.
Rishon Lezion
Change in number of transactions: 44% -
Change in the number of transactions in second-hand apartments: 36.5% -
Change in the number of transactions in new dwellings: 52.6% -
Change in the price of second-hand apartments: 0.9%
Price change for new apartments: 2.63%
The fourth largest city in Israel, and the largest in the cities of the Central District, shows a price increase of about 2.6% in the new apartments.
The rise in second-hand apartment prices has almost completely stopped - only 0.9%.
It is possible that the overcrowding and depreciation in second-hand apartments, which often do not even include a balcony, do their part in the Corona period, making them increasingly difficult to sell.
At the same time, it is possible that new residents, who move to the city from the Tel Aviv district in search of larger and cheaper apartments, prefer new apartments, which reduces the demand for second-hand apartments.
Petah Tikva
Change in number of transactions: 38% -
Change in the number of transactions in second-hand apartments: 35% -
Change in the number of transactions in new dwellings: 46.9% -
Change in the price of second-hand apartments: 2.94%
Change in the price of new apartments: 3.7%
In 2020, Petah Tikva showed the highest increase in the price of second-hand apartments in the city (2.9%), but the prices of new apartments in the city also rose nicely - by 3.7%.
The city has recently experienced a significant impetus for new construction, with the establishment of the spoken neighborhood (for better or worse) in Sirkin, a host of urban renewal projects (which have become significant in the city), and many transportation benefits.
Also at the planning level, the city has great potential with expected lines of the light rail and later also the metro, and even a significant transport change like the diversion of Route 40.
Nahariya
Change in number of transactions: 22.1% -
Change in the number of transactions in second-hand apartments: 36.3% -
Change in the number of transactions in new dwellings: 5.8% -
Change in the price of second-hand apartments: 0.89%
Change in the price of new apartments: 3.73%
The northernmost city in the survey shows a mixed trend of a relatively low increase, of less than 1%, in second-hand apartment prices, and a higher increase, of 3.7%, in new apartment prices.
It is quite possible that the corona, which made it clear to many that in today's world of work there is no longer a need to live in the "center of the pavilion", has led to an increase in demand and prices in Nahariya.
For the price of a small apartment in the center of the country, you can live in Nahariya and enjoy a higher quality of life near the sea, in a larger and newer apartment, and without being enslaved to high mortgages.
Afula
Change in number of transactions: 30.7% -
Change in the number of transactions in second-hand apartments: 8.9% -
Change in the number of transactions in new dwellings: 56.5% -
Change in the price of second-hand apartments: 1.19% -
Price change for new apartments: 2.88%
The capital of the valley shows a trend of a nice increase in the prices of new apartments, but in its case - the increase clearly comes at the expense of second-hand apartments, whose prices in 2020 fell by 1.2% compared to 2019.
Here, too, we are probably seeing the impact of the corona, and the growing demand for large, new apartments at relatively affordable prices that do not require a mortgage lien.
Produced by the Department of Special Supplements