the number of transactions in September was among the highest in the last twenty years

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by Ifi Reporter Category:Real Estate Nov 9, 2020

Despite the corona crisis, the closure and the High holidays, the number of transactions in September 2020 was among the highest recorded in September in the last twenty years, both in terms of total transactions and those made in the free market only. This is according to data from the chief economist at the Ministry of Finance.
The numbers indicate that last September 9,600 apartments were purchased (including price-per-tenant apartments), unchanged from September 2019 and a decrease of 11% compared to the high level of transactions recorded in the previous month. These are particularly surprising figures, which according to the report were also surprised by the Treasury - and noted that the figures are surprising both in light of the fact that the Tishrei holidays began this year in mid-September and in light of the second closure that began on the 18th of that month.
The explanation they nevertheless found in the Treasury for the relatively high level of transactions last September lies in the significant advance of a significant portion of the transactions to the three days preceding the closure.
September was characterized by stability, which interrupted the roller coaster that has characterized the industry for the past four months. After deducting price-per-tenant transactions, the number of transactions in September amounted to 8,500 apartments, an increase of 12% compared to September last year and a decrease of 8% compared to the previous month.
The surprising data were reflected in additional segments of the housing industry: Thus, the second-hand housing market in September stood at 6,000, transactions increased by 5% compared to September last year and decreased by 11% compared to the previous month. The increase in the sale of second-hand apartments was led by investors.
As mentioned, the Ministry of Finance identified that in September the buyers tried to bring forward the transactions to the days before the closure, and thus in the three days prior to it, 28% of the total transactions were concentrated in second-hand apartments made that month. Concentrating a large portion of transactions in this form may imply pressure from buyers or sellers to close a transaction, especially when it was not entirely clear how long the closure is expected to last. Meanwhile, the Treasury was unable to identify whether the pressure came from buyers or sellers, but did identify that the transactions made up to September 14 were at 5.5% lower prices than those of the transactions closed in the three days before the closure.
Contractors' sales (excluding purchasing and self-construction groups) in September totaled 3,600 apartments, of which 1,100 apartments were sold as part of a price per occupant. Compared to September last year, contractors' sales fell by 7%, but this decline is concentrated in the market segment of price per occupant; Thus, after deducting these sales, there was a sharp increase, of 37%, in the sales of contractors in the free market compared to September last year. Compared to the previous month, contractors' sales in the free market decreased by 2%.
The contractors' cash flow from the sale of new apartments (including price-per-tenant apartments) in September amounted to NIS 6.3 billion, a moderate real increase of 2% compared to September last year and a decrease of 10% compared to the previous month. As part of the price per occupant, significantly lower than this weight in September last year, then stood at 35%, which reflects the sharp decline in sales as part of the price per occupant last September compared to last year.
The volume of apartments purchased by couples for whom this was the first apartment in September amounted to 4,700 apartments, a decrease of 9% compared to September 2019 and a decrease of 11% compared to the previous month. However, after deducting purchases at a price per occupant, purchases by young couples in the free market increased by 15% compared to September last year, and decreased by 4% compared to the previous month. In the geographical segmentation, the Jerusalem area continues to stand out, with a sharp 52% ​​increase in purchases by young couples in the free market compared to September last year. On the other hand, the central region continues to stand out with stagnation in these acquisitions.
The number of dwellings sold as part of the price per occupant in September amounted to only 1,100 dwellings, a sharp decrease of 47% compared with September last year and a decrease of 28% compared with the previous month.
Investor purchases in September totaled 1,700 apartments, an increase of 54% compared to September last year, following a sharp 64% increase recorded in August, after lowering the purchase tax on investors. Compared to August, investors' purchases in September fell by a moderate 2%.
Analysis of the findings shows that while the sharp rise in investor purchases in August was at least partly due to a postponement of transactions from July (pending the expected tax cut), the sharp rise in September may already reflect a partial return of investors to the market. The share of investors in total transactions was 17.5%, an increase of 0.6% compared to September last year.
In a geographical segmentation, it was found that the increase in investor purchases encompassed all areas, with the exception of the Netanya area - where a decrease of 10% was recorded. On the other hand, the Rehovot area stood out, where investors' purchases doubled compared to September last year. An analysis of the price levels of apartments purchased for investment in August-September found that these are lower compared to the first seven months of the year: for example, the average price of an apartment purchased in September was NIS 1.67 million, 10% lower than in July, before tax. , And 14% lower than the average for the first seven months of the year. Investors' sales in September amounted to 2,000 apartments, an increase of 26% compared to September last year, and significantly higher than the rate of increase recorded in the sale of second-hand apartments (an increase of 5%).
The "inventory" of apartments held by investors also decreased in September, during which about 300 apartments were deducted from this inventory. Since the stock of apartments began to fall by investors in April 2016, about 27,000 apartments have been deducted from it in total by last September.

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