A record number of homes were purchased in Israel in the fourth quarter of 2013, 29% more than the preceding quarter, and 24% of them were purchased by investors.
Home sales hit a ten-year high as investors rushed to sell unwanted properties before their capital gains tax exemption ended in December 2013. Another factor in the increase in purchases was the launch of the major new real estate development in Rosh Ha’Ayin (as we reported here).
While homebuyer purchases rose 27% in the last quarter of 2013, there are indications that home buying will have slowed in the first quarter of 2014 as many young couples are waiting to see if the government will introduce the tax breaks that they have been promising. The Ministry of Finance says that the tightening of mortgage restrictions is also causing first-time buyers to buy second-hand rather than new apartments.
While some commentators warn of an imminent fall in real estate prices, housing in Israel is expensive. The government’s continuing promises to reduce housing prices has been shown to be unreliable – they have been slow to release more land for housing development. It seems clear that the demand for housing continues to exceed supply, which will always be limited in a country as small as Israel. With an annual population growth of 1.8% and a steady influx of Olim, particularly to the main population centres, property prices are likely to remain high.
So when is the best time to buy a property in Israel? We say always!
Now or next year, whether you are planning to live in Israel sooner or later, using it for rental income or for your children, owning a home in the Holy Land is the best investment you can make!
L’Shana Haba B’Yerushalayim – Happy Pesach to everyone!