Home sales plummet by 65% in October, amid prolonged housing crisis

With Israel undergoing a housing crisis that has seen a market slowdown and soaring prices, the government published data Tuesday showing that home sales in October plummeted by a staggering 65 percent compared to the same month last year.

With just 5,100 apartments sold, it was the slowest month in the real estate market since April 2020 — when the entire country was at a standstill due to the initial COVID-19 lockdown — and one of the slowest Octobers in the past 20 years, according to the figures published by the Finance Ministry and reported in Hebrew media.

The ministry’s chief economist, Shira Greenberg, also said that initial data for November similarly indicates a sharp drop compared to the same time last year.

When viewed by locality, home sales in October dropped in every Israeli locality compared to October 2021 except Tiberias, where there was a 10% rise. The extreme slowdown was particularly felt in Tel Aviv, where there was an 84% drop in apartment purchases.

Some of the general 65% drop in home sales is explained by the fact that October this year, unlike October 2021, included a period of several successive Jewish holidays during which the market slows down anyway. Additionally, October 2021 saw increased activity due to the announcement that the purchase tax would be hiked the following month.

But even when compared with September 2021, which included the Jewish holiday period, sales in October 2022 were down 36%. The figures also represent a 36% drop compared with September 2022.

Another factor is the soaring housing prices, which rose by a record 19% between October 2021 and October 2022, according to the Central Bureau of Statistics, the largest year-on-year jump since price tracking began.

Prices have been climbing steadily since the second half of 2018, but their continued rise has defied predictions, a drop in demand and the reality in most global housing markets, which are seeing prices slow or fall.

Shira Greenberg, chief economist of the Finance Ministry, attends a press conference at the Finance Ministry office in Jerusalem, September 23, 2019. (Flash90)

The homes sold in October include 4,700 sold in the free market (the rest were government-subsidized), of which 3,200 were secondhand apartments — the lowest figure for secondhand apartment sales during any October in the past 20 years.

Data from earlier this year shows that while the slowdown trend has intensified, it isn’t new. Last month, The Central Bureau of Statistics said sales were down 22.7% in July-September compared to the previous three months, or 17.7% when adjusted for seasonality. Sales between May and July fell compared to the preceding three months by 9.9%, or 10.9% when adjustments for seasonality are made.