Is a Dip in New Apartment Sales Good News for Buyers?
According to a recent Globes article, the number of new apartment sales in Israel is on the decline. The Ministry of Finance and Central Bureau of Statistics reports that while 1.7 percent more new apartments were sold in July 2016 than in June 2016, compared to July 2015, the number of new units sold has fallen by 19.3 percent. Looking at the year so far, the trend seems to be holding, as records show that from January to July, 2016, the number of new apartment sales in Israel was 6.7 percent below the number of sales during this same time period one year ago. The central Bureau of Statistics also reports that demand for housing is on the decline.
The biggest decline in new apartment sales is in northern Israel where new sales decreased by 15%. Following closely behind is Tel Aviv and then Haifa. Sales in the south, though, rose by 12%.
Lower sales across all sectors
In general, according the Ministry of Finance, fewer real estate transactions in general took place during the second quarter of 2016. This is primarily due to the drop in new apartment sales, but also in sales of affordable or starter homes. Investor purchases has also fallen off, with more investors looking to sell their properties than investors ready to purchase.
What does it mean?
If you are looking to buy a new apartment in Israel, it could mean that you will be able to negotiate a better price with the developer. In most cities in Israel, the developer needs sales in order to complete the project. If you look around in some northern cities, particularly in Tiberias, you might see some half-completed buildings. This is because the developer did not sell enough units or the early purchasers have failed to make the installment payments. Therefore, it could be that this is an opportunity for you to jump in and purchase a new apartment in Israel at a more reasonable price. Will it stay this way? Only G-d knows, but in the meantime, if you have set your heart on a new residence, this could be the best time to buy just what you want and have some money leftover.