Number of real estate deals down 22%
Drop in number of home purchases in August led by young couples, Treasury says. Further decline expected in September figures
The August figure marks a 15% drop in the number of purchased apartments from the same period last year, according to the Finance Ministry's "Red Lights" report released Sunday.
Treasury economists predict an additional drop in the number of transactions in September. They further note that the sharp decline in housing deals in Israel covered nearly all areas, apart from Beersheba, which recorded a moderate increase.
In Jerusalem, real estate deals fell 57% from July, and were down 22% from August 2012.
It should be noted that half of those who sold their apartment in Beersheba in August owned the property for three years or less. Treasury officials estimate that this stems, among other things, from the fact that starting in January 2014, a betterment tax will be imposed on anyone who owns more than one apartment.
A breakdown of the type of buyers reveals that the decline in the number of transactions in August was led by young couples with a 30% drop in home purchases from July.
Apartment purchases by investors fell 20% in August, yet the percentage of investors in all housing transactions went up slightly – mainly due to the increase in the number of investors in the Haifa area. Investors execute about 25% of all housing transactions today.
Cautious optimism
Later in the review, the Treasury economists say the past month recorded an improvement in most economic indices, including the unemployment rate, the business sector proceeds and tax collection. Stability was registered in the capital market and consumer price index.
Finance Ministry officials maintain cautious optimism in regards to the economic situation. Despite the positive indices, they imply that it is premature to declare a positive trend rather than one-time changes.
For example, high-tech industries recorded in August a 2.8% increase in production from July, contrary to the downward trend until then. Israeli exports recorded a slight 1.1% increase in August, once again contrary to the previous months' trend.
In addition, as the consumer price index went up in August by just 0.2%, the Bank of Israel reduced interest rate by 0.25% - which comes as another sign of relative stability in the economy, at least at this stage.
The improvement trend continued in the labor market as well. According to the figures, the unemployment rate fell by a further 0.1% in August, reaching 6.1%.
