Israeli real estate prices in January 2024 – are they starting to pick up?

March 16, 2024 / 118 views
Alin Goldshtein
+972-50-781-8814
March 16, 2024 / 118 views

In January 2024, the real estate market experienced its strongest month in terms of transaction volume compared to the entire year of 2023, according to data published today by the Central Bureau of Statistics (CBS). The data reveals that at the beginning of the year, 7,887 apartments were sold – a 17.7% increase compared to the same period last year (January 2023), when 6,699 apartments were sold.

This article was translated from Ynet site.

Who is the winner? New apartments or second hand apartments?

Compared to the previous month (December 2023), when 5,948 apartments were sold, this represents a 32.5% increase. Moreover, the number of apartments sold last January was the highest since July 2022. Another dramatic figure is the meteoric rise in the purchase of new apartments, compared to the sector of second-hand apartments. While 3,750 new apartments were sold in January – a 44% jump compared to January last year; among the old apartments, there was only a 1.1% increase, after 4,137 second-hand apartments were sold.

It should be noted that yesterday, the Chief Economist’s Office at the Ministry of Finance published data indicating a recovery in the real estate sector in January, which showed an increase in apartment sales, with a significant number of new apartment transactions. The reason for this is that due to the large inventory of apartments not yet sold by the contractors, alongside the high-interest rates and the stagnation in the market that characterized the past year, they continue to provide significant financing benefits to buyers of new apartments. There are additional reasons for the higher portion of new homes being sold. Here is the link to our previous article on this subject.

Let's check the first hand real estate market

Furthermore, according to CBS data, in the three months from November 2023 to January 2024, approximately 17,870 apartments were sold – an increase of 21.9% compared to the previous three months, August-October 2023. 45.3% of the total apartments sold were new apartments (approximately 8,090 apartments) – an increase of 25.3% compared to the previous three months. About a fifth (21.1%) of the new apartments were sold with government subsidy (discounted housing programs). This is about 1,705 housing units.

54.7% of the total apartments sold in the three months from November 2023 to January 2024 were second-hand apartments, about 9,780 apartments – an increase of 19.3% compared to the previous three months. The CBS indicates that an analysis of the trend data shows that from September 2021 to date, there has been a 2.7% decrease on average in the total number of apartments sold. However, the decrease in second-hand apartments sold was more pronounced than the decrease in new apartments – 3% compared to 2.5%, respectively.

Which district is the most popular?

The Central district leads with 26.2% of the total apartments sold in the three months from November 2023 to January 2024. In this district, almost a third of the new apartments were sold (29.2%) and a quarter of the second-hand apartments (23.6%). The Southern district follows with 20.9% of the total apartments sold: 21.6% of the new apartments and 20.3% of the second-hand apartments.

The leading cities in the sale of new apartments in the three months from November 2023 to January 2024 are Jerusalem (584 housing units sold), Ashdod (524), Tel Aviv-Yafo (358), Petah Tikva (339), and Rishon LeZion (305). In all the cities surveyed, there were increases in the volume of transactions for the sale of new apartments, with Ohr Yehuda, Netivot, and Beersheba leading the increases. Ashkelon is the only city that experienced a decrease in the sale of new apartments, with a rate of about 45% compared to the previous three months.

The leading cities in the sale of second-hand apartments are Haifa (689), Jerusalem (640), Beersheba (617), Tel Aviv-Yafo (332), and Petah Tikva (329). In all the cities surveyed, there were increases in the volume of transactions for the sale of second-hand apartments, with Rishon LeZion leading the increases.

As for the inventory of apartments remaining for sale by the contractors, the data shows that by the end of January 2024, it had decreased compared to December 2023 and stood at approximately 67,980 new apartments, although this is still a very high figure. The number of months of supply (i.e., the number of months it will take for all the remaining apartments to be sold) stood at 26.8 months.

30.2% of the remaining apartments for sale are located in the Tel Aviv district (20,520 apartments) and 25.3% in the Central district (17,180 apartments). In large cities, with populations exceeding 100,000 residents, Tel Aviv-Yafo leads with approximately 7,940 apartments remaining for sale, followed by Jerusalem with approximately 5,640 apartments remaining for sale.

 

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