Housing Market Shows Signs of Recovery in November But Still Lags Behind Historic Norms

In a recent report from the Chief Economist Division at the Ministry of Finance, November 2023 witnessed a partial rebound in housing market activity compared to the previous month. However, the numbers remain alarmingly low, marking the lowest level of transactions recorded in November over the past two decades.

Key Points:

1. Lowest November Transactions in 20 Years: The housing market saw a modest recovery in November with 4,133 new and second-hand apartments sold. Despite this improvement, it remains the lowest level of transactions in November in at least the last 20 years.

2. Comparison to Previous Economic Challenges: Even during November 2002, amidst the second intifada and economic recession, transactions were 28% higher than the current recorded numbers, highlighting the severity of the current downturn.

3. Year-over-Year Decline: Compared to November 2022, there was a significant 47% decrease in transactions. Although this is a notable drop, it is a slightly moderated rate compared to the decline observed in October 2023.

4. Monthly Fluctuations: November saw an 85% increase in transactions compared to October 2023. However, the Treasury attributes this spike to the exceptionally low activity during the war and reduced working days due to the Sukkot holiday.

5. Segment-Specific Decline: The decline in transactions is particularly pronounced in the second-hand apartment market, emphasizing the challenges in that specific segment. In contrast, the sale of new apartments outpaced figures from November 2008, during the global economic crisis, and November 2011 amid social protests.

6. Contractor Sales: Apartment sales from contractors totaled 1,496 in November, including 152 government-subsidized units. This marks a 49% decrease compared to the same month in 2022, indicating a broader market slowdown.

The housing market, though showing signs of recovery in November, remains far below historical norms. The decline in second-hand apartment transactions, coupled with a notable drop in overall sales compared to previous years, paints a challenging picture for the real estate sector. The report suggests ongoing economic and geopolitical factors contributing to the subdued market conditions.