New home sales in Tel Aviv plummet

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Sales of new apartments in Tel Aviv have plummeted, and the city, which led the residential real estate market in the last few years, reached only eighth place in the Central Bureau of Statistics table of sales of new homes in the three month period December 2022-February 2023.

Jerusalem heads the table for that period, with 885 sales. Then come Netivot (492), Petah Tikva (343), Ashkelon (299), and Ramat Gan (280). In Tel Aviv, only 245 new apartments were sold in the period, down from 1,042 in December 2021-February 2022, when Tel Aviv led the table.

Residential construction credit: Shutterstock

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On a district level too, the Tel Aviv district saw a steep decline in sales, although not as great as in the city itself. The year-on-year decline was 46%, to 1,211 new apartments sold in December 2022-February 2023. Nationwide, the decline was 39%.

The stock of unsold homes held by real estate developers in February was 54,500, a four-year peak, and a result of a faster rate of building starts than of sales.

According to Central Bureau of Statistics figures, at the end of January this year there was a stock of some 15,000 unsold homes in the Tel Aviv district, indicating accumulating excess supply.

While purchases of new homes in Tel Aviv are declining, on a national level the decline, which began in the final quarter of 2021, has halted for now, according to the Central Bureau of Statistics numbers. 2,506 new homes were sold in February, which, in the trend figures, represents a 1% increase over January. This is the first monthly rise in sales in eighteen months.

Has the trend changed? It appears that the many special sales campaigns have succeeded in putting the brakes on the decline, which in the second quarter of last year reached more than 6% a month. Nevertheless, the special offers and discounts will probably have to continue, and even grow, to keep new home sales at a reasonable level, and the market is a long way from such a level at the moment. Sales in February this year were about a third lower than in February 2021 and 2022.

Published by Globes, Israel business news – en.globes.co.il – on April 20, 2023.

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