Drop in number of apartments bought as part of purchase groups (illustration)
Photo: Shuttetsrock
Demand for apartments down 6%
First two months of 2013 record decline in home purchases, construction of apartments for rent and personal use compared to 2012. Drop in demands felt mostly in northern, Tel Aviv and southern districts
The year 2013 began with a decline in the demand for apartments: According to figures released by the Central Bureau of Statistics, the first two months of the year saw a 6% drop in the demand for apartments in Israel
compared to 2012, and a 2% drop compared to the last two months of 2012.
The drop in demands is felt in most parts of the country, with a 25% drop in the northern district, a 6% drop in the Tel Aviv and southern districts and a 2% drop in the central district.
The number of apartments sold or built in January 2013 reflected a drop of about 20% in demands compared to January 2012, and about 12% compared to December 2012.
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On the other hand, a 19% increase was recorded in the demand for apartments in the Haifa district, and a 12% increase in the Jerusalem district.
The drop in demands between the first two months of 2012 and the first two months of 2013 stems mainly from a drop in the number of apartments built for rental purposes and personal use, and the number of apartments bought as part of purchase groups.
A comparison between the periods reveals a 24.5% increase in the number of apartments purchased compared to a 34.3% drop in the number of apartments built not for sale purposes.
Despite the drop in demands, the number of apartments remaining "on the shelf" (apartments still on sale) continues to drop due to the slowdown in the building pace throughout 2012. In late February 2013, "only" 20,670 new apartments remained without a buyer – down 4.5% from late February 2012.
The CBS figures reveal that 2,110 apartments were sold in Israel in February and another 1,180 were bought for rental purposes, personal use and as part of purchase groups. This is a slight increase compared to January, which saw the sale of 2,050 apartments and the construction of an additional 1,140.
'Situation will deteriorate significantly'
Chairman of the Real Estate Appraisers Association in Israel Ohad Danus said in response to the figures, "Today we see the results of the powerlessness of those who are supposed to increase the supply of apartments in Israel, while improving and encouraging the industry – rather than crushing it."
He added that "the developing trend is extremely troubling, because while the natural growth in Israel cannot be suppressed and should even be encouraged, the housing market can be suppressed – and this is what the government has been doing successfully in the past year.
"If (the government) fails to deal with the urgent issues of construction for rental purposes, municipal renewal and significant property tax relief, construction credit and manpower, the situation will only deteriorate.
"About two weeks ago, the new housing and construction minister said honestly that we should not expect a dramatic change in 2013. We would like to warn the minister that if the aforementioned issues are not dealt with, the situation in 2013 will not only remain unchanged, but will become significantly worse."
