Yavne. Ongoing trend of building both large and small flats

Drop in number of large apartments

Flat buyers' difficulty to withstand high prices affects contractors' decisions

Reuters | Published: 09.21.11, 08:28

Only some 49.5% of the apartments on which construction began in the first half of 2011 are five-room flats or larger, as oppose to 54% in all of 2010, according to data released by the Central Bureau of Statistics, based on analysis by Adler Marketing economists.

According to senior sources in the industry, in as early as 2010 contractors began noticing rising demand for less expansive flats and they adjusted construction plans accordingly.

This trend of demand is evident in the number of housing starts of three-room flats and smaller flats which climbed from 6% in 2010 to 10.5% in the beginning of 2011.

The new trend is not sweeping: In Tel Aviv and Ramat Gan, building starts of large flats dropped, but negligibly – in both cities in the first half of 2011, there were 40 housing starts for six-room apartments; however, in Hod Hasharon, there were 170 building starts for six-room apartments – 51% of the total number of housing starts in the city, as oppose to 34% in 2010.

Building starts for six-room flats were prominent in Yavne and Petah Tikva as well with 118 and 115 starts respectively. In Modiin, the number of housing starts on six-room flats skyrocketed from 7% in 2010 to 51% in 2011.

Eldar Marketing CEO Ronny Cohen explains that in cities with a higher cost of living, there is a stronger inclination to construct flats of up to five rooms.

However, he says, "in new developments in cities such as Petah Tikva and Yavne, we will see an ongoing trend of building both large and small flats as demand in these cities is dictated by 'housing improvers'. I expect this trend to grow."