Meitav Investment House Ltd. chief economist and strategist Ron Eichel believes, "The potential to curb real estate prices over the next few months is rising, especially for house prices (and not apartment rentals)." Eichel also wrote in a survey entitled, "The housing market is going into hibernation" that "If the government fulfills its promises, housing prices are expected to go into hibernation for years."
Eichel's survey followed the publication of data on the level of demand for new apartments in June, which showed that the trend that began last month is strengthening: the demand for apartments is falling.
The survey found that in June alone, demand for apartments plummeted 18% compared with the previous month. The number of apartments sold in the second quarter was 21% lower than in the first quarter.
On the supply side, the Yad2 sales website shows that the number of apartments offered for sale rose significantly over the last few months. The number of advertisements for apartment sales was 14% higher in July than at the beginning of the year. It can definitely be seen that these two indicators are encouraging stability in real estate market prices, Eichel observed.
According to Eichel, another indicator that points towards a slight calming in the housing market is the "number of months' supply" - a statistic that represents the number of months required to sell the entire inventory of apartments currently on the market, assuming that new apartments would be not be added. According to seasonally adjusted data, the number of months' supply in June was 8.8. This is the highest number since the beginning of 2009, which means that the level of apartment sales relative to market supply is the lowest it's been since January 2009.
"Moreover, apartment prices are inversely proportional to the monthly trend of supply. This definitely indicates a change in the monthly trend of supply. Therefore, we definitely expect a curbing in apartment prices in the next few months," Eichel noted.
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