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Poll: Housing market to see 10% drop in September
Geocartography Institute survey predicts housing market will experience slump in coming month after relative surge in sales
The majority of the Israeli public believes that the housing market it heading for a slump after several months of booming sales, a poll by the Geocartography Knowledge Group (GCKG) revealed Wednesday.
The consultancy and applied-research institute found that the public believes the same factors that have contributed to the market noting in increase in activity, namely low interest rates on mortgages and fewer new building projects, will also be the ones to overturn the trend.
GCKG's data indicated that the recent increase in interest rates is likely to affect mostly those who are planning to buy real estate for investment purposes, and 15% of those planning to by their first apartment or renovate an existing one will also be affected.
May and June saw the real estate market experience a surge in sales, but according to Construction and Housing Ministry and Central Bureau of Statistics numbers, the market began experiencing a slump in July.
August saw Bank of Israel Governor Stanley Fischer be the first in the world to up interest rates, and buyers – according to Dr. Rina Degani, GCKG's managing director – reacted accordingly: "About 25% of those planning to take out a housing loan were highly affected by the low interest rates on mortgages, but the recent increase will have an immediate affect on the mortgages market," she said.
According to Degani, the overall percentage of people planning to purchase apartments in September will drop by 8%.
As for the nature of housing transactions expected in September, Degani said that about 28% of the buys would be for investment purposes, 37% will by first-time buyers and 35% are expected to upgrade their living conditions.
