Finance Ministry reports 5-year low in housing sales

Finance Ministry reveals October 2016 had lowest number of homes purchased since 2011.

Arutz Sheva Staff ,

Apartments in Holyland, Jerusalem
Apartments in Holyland, Jerusalem
Ben Bresky

Israel's Finance Ministry reported a significant drop in the number of homes sold during October-November 2016. During these months, only 4,700 apartments were sold in all of Israel. 1,300 of these apartments were bought in October, and 2,300 were bought in November.

The Finance Ministry also warned the recent lull may be the beginning of something bigger, and that less people will be taking mortgages in coming months.

This drop comes just after the number of investors buying apartments to rent out dropped drastically, to a mere 17-18% of purchases. In addition, more young couples were waiting to be selected for a "Mechir Lemishtaken" subsidized housing project, and less were interested in purchasing independently.

Young couples bought a total of 3,900 apartments during November 2016. These numbers are similar to the monthly average of January-September of the same year, but show a 6% drop from 2015.

Since 2002, only five months saw less purchases than October-November 2016. Though Israelis tend to blame the Tishrei holidays (which fall out in September-October) for the lull, the number of sales in October-November 2016 was 9-10% less than the sales during the same period in previous years.

In Be'er Sheva, which is relatively cheap in comparison to Jerusalem and the center of the country, investors bought only 800 apartments, representing the parameter's lowest number in history.

Be'er Sheva has been one of the most popular cities to invest in during the past decade, but the number of purchases in October-November 2016 was 14% less than the national average during the same period.

One main reason investors may be buying less apartments is Finance Minister Moshe Kahlon's proposed law taxing owners of three or more apartments. The law aims to lower housing prices by encouraging owners to sell their apartments, thus raising the number of homes on the market. However, despite a slight drop in prices during February 2016, prices for Israeli apartments have not dropped significantly.

MK Eliezer Moses (UTJ) said the reason young couples hesitate to buy an apartment is the high cost of mortgages, and called on the government to subsidize mortgages. In his opinion, even if young couples move to the periphery, they cannot escape high prices.