Apartment Sales Up Despite Zero-VAT Plan

Statistics that the public had already several months ago given up on the possibility of getting an apartment at an 18% discount.

Moshe Cohen,

Israeli flag at construction site in Har Homa
Israeli flag at construction site in Har Homa
Hadas Parush/Flash 90

Conventional wisdom had it that Israelis had largely stopped buying apartments as they waited for former Finance Minister Yair Lapid's zero-VAT sales plan to kick in, but Central Bureau of Statistics numbers released Wednesday show that the public had already several months ago given up on the possibility of getting an apartment at an 18% discount. During the third quarter of 2014, home sales were up 4%, indicating that many people who had been sitting on the fence about buying had made a decision.

A further indication of that decision-making was evident in the fact that 5,400 of the 23,200 homes bought during the period were brand new ones – the kinds of homes that the zero-VAT plan would have covered. That was a 12.1% increase in the purchase of new homes over the second quarter. New home purchases were up in Tel Aviv, Jerusalem, Haifa, and other cities.

On the other hand, many of the buyers of apartments were actually investors buying for apartment appreciation and to collect rent. That as especially true in Harish, the new city being built in the Wadi Ara area. According to statistics, 42% of home buyers there already owned another property, and bad bought the new apartment for investment purposes.




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