Bethel Finance: Treasury: Home sales continue to fall

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Bethel Finance news:
Home sales in the third quarter of 2011 were the lowest level since the fourth quarter of 2008.

19,400 new and second-hand homes were sold in the third quarter of 2011, 11% fewer than in the preceding quarter and 16% fewer than in the corresponding quarter of 2010, the Ministry of Finance reports in its quarterly macroeconomic review. The ministry added that the third quarter 2011 figures are upwardly biased, since the Jewish holidays took place entirely in September this year, compared with October last year.

New and second-hand home sales in the Tel Aviv area were 4% higher in the third quarter compared with the preceding quarter, driven by a 9% increase in second-hand home sales. However, home sales in the rest of the country were down. New home sales in the rest of the country were 10% lower in the third quarter from the preceding quarter and 31% lower from the corresponding quarter.

"Compared with the corresponding quarters of last year, this quarter saw lowest level of sales since the recession year of 2002," said the Ministry of Finance. In contrast to the crisis in late 2008, when new homes sales fell by 44%, sales by the top 30 contractors actually rose by 4%." It adds, however, that contractors are not immune in the current crisis, saying, "The proportion of new home sales at the end of the third quarter fell to its lowest level in the past two years."

Second-hand home sells were 8% lower in the third quarter compared with the preceding quarter, and 12% less than in the corresponding quarter.

Home prices were 3.6% lower in the third quarter than in the preceding quarter. The sharpest fall was in the Jerusalem area, down 5.9%, and in the Sharon, down 5.5%. Prices fell 2.2% in the central area, 1.9% in Beersheva, and 0.7% in Haifa.

Purchases of homes for investment in the third quarter were 27% less than in the preceding quarter and 9.5% less than in the corresponding quarter. Tel Aviv was the exception: purchases of homes for investment in Tel Aviv were 16% higher in the third quarter over the preceding quarter.

Purchases of home by foreign residents rose by 11% in the third quarter compared with the preceding quarter, accounting for 4.8% of all home sales.