Israel's real estate market, seen through Ministry of Finance spectacles, is not just cooling, it's already deep in the refrigerator. The ministry's monthly Red Lights survey, published today, states that new home prices fell again in April, together with a sharp drop in the number of transactions and the number of apartments bought for investment.
The median price of homes fell 0.8% in April, compared with March. The Ministry of Finance says, "Prices fell in all districts, except for a 2.4% rise in prices in Haifa, and in Beersheva, where prices were unchanged."
The Central Bureau of Statistics will publish its survey of home prices on Wednesday. This survey is a basis for the Bank of Israel's monetary policy and its policy for the mortgage market.
For many months, the figures published by the Ministry of Finance and the Central Bureau of Statistics have flatly contradicted each other. Almost every month, the Ministry of Finance has reported that home prices fell, while the Central Bureau of Statistics has reported a steady rise in home prices for the past two years.
According to the Ministry of Finance, 30.6% fewer apartments were bought in April than in March; 35% fewer new apartments were bought and transactions in second-hand apartments fell 29%. The sharpest fall in home purchases was in the Sharon, where 25% fewer apartments for investment were bought in April, compared with March. In Tel Aviv, 42% fewer apartments were bought in April than in March.
In the Red Lights survey, the Ministry of Finance also cited a number of warning signs about the general economic situation: a fall in exports of goods in April, after rises in the three preceding months; a substantial fall in the number of incoming tourists; a stagnating US economy; and continuing inflationary pressures in Israel.
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