Israel Matzav

Apartment prices fall but rents rise

Although the trends were uneven, on the whole, apartment prices in Israel fell in the second quarter of this year, while rents rose.

The average home price fell 6.5% in Tel Aviv to NIS 1.83 million in the second quarter from NIS 1.96 in the preceding quarter, and fell by 0.2% in Jerusalem to NIS 1.53 million from NIS 1.54 million. The drops affected the high-end market more than the low-end market. In Tel Aviv, the average price of a 4.5-5 room apartment fell 15% to NIS 3.06 million in the second quarter from NIS 3.62 million in the corresponding quarter, but the average price of a 2.5-3 room apartment rose 1.4% to NIS 1.66 million from NIS 1.64 million.

The average home price in Haifa rose 10.7% to NIS 801,600 in the second quarter from NIS 723,500 in the corresponding quarter. Prices rose in all market segments; the average price of a 4.5-5 room apartment rose to NIS 1.41 million.

The average home price in the Dan region rose to NIS 1.26 million from NIS 1.24 million, and rose in the neighboring Central region to NIS 1.21 million from NIS 1.19 million, but fell 6.6% in the Sharon region to NIS 1.34 million from NIS 1.44 million.

The average home price in the Southern region fell to NIS 776,700 in the second quarter from NIS 794,700 in the preceding quarter, but rose to NIS 724,500 in the North from NIS 646,400.

Even as home prices fell, rent rose, with the exception of Jerusalem. The national average rent rose 1.4% to NIS 3,103 in the second quarter from NIS 3,059 in the preceding quarter. Rent rose in all market segments. In Tel Aviv, the average rent rose to NIS 4,408 in the second quarter from NIS 4,356 in the corresponding quarter, with rent for 4.5-5 room apartments rising to NIS 7,207 from NIS 6,904.

In Jerusalem, the average rent dipped 0.6% to NIS 3,533 in the second quarter from NIS 3,556, although rent for 4.5-5 room apartments rose to NIS 5,249 from NIS 5,149.

For those looking for a frame of reference, the current exchange rate is a bit over NIS 3.50 to the dollar.

There is a widespread belief in Israel that apartment prices will never fall. Building more housing would only mean that people who are currently living in cramped conditions would be able to move to larger apartments. So far, at least, the trend in housing prices has almost always been upward.

Labels: housing crisis, Israeli economy

posted by Carl in Jerusalem @ 10:27 PM