Last summer's cost-of-living protests adversely affected home sales toward the end of 2011, making the fourth quarter the worst in years for the real estate market.
The number of home sales were down 55% compared to the parallel period in 2010, found a report by the Finance Ministry's State Revenue Administration. Home sales in Tel Aviv plummeted 84%.
"Since the protest began, new home sales in Tel Aviv hit a 10-year low," states the report.
Another report, this one by the Central Bureau of Statistics, found the price of four-room apartments purchased in the last quarter of 2011 in Tel Aviv was 14% less than in the third quarter.
A total of 18,600 apartments were sold around the country in the fourth quarter - 37% less than in the final quarter of 2010. This was fewer than in the third quarter of 2011, which had been considered the worst quarter for home sales since the global financial crisis broke out in 2008.
In total, there were 17% fewer home sales in 2011 than in 2010.
The biggest decreases were in Jerusalem, Tel Aviv and the upper Galilee. Most of the drop was in new home sales.
Home sales actually increased in the northern Sharon reason thanks to group home sales targeting members of the security forces' consumer club, Hever.
The first to feel the effects were contractors, who saw sales drop 55% versus the fourth quarter of 2010, and 4% versus the third quarter of 2011.
"In the second half of 2011, 390 new homes were sold in Tel Aviv [including 148 in the fourth quarter], the decade's smallest figure," states the State Revenue Administration report. It has the earliest figures for that quarter's sales, it notes.
"We can presume that the social protest that broke out over the summer influenced the nadir in home sales in the second half of 2011," it adds. Home prices declined 4% in the fourth quarter of 2011 versus the previous quarter. In total, new home prices declined 13% last year.
Another report by the statistics bureau, published over the weekend, found that homes purchased in the fourth quarter of 2011 cost on average 1.8% less than those purchased in the third quarter, and 1.2% less than those purchased in the fourth quarter of 2010.
The sharpest decreases were in 4.5- to 5-room apartments purchased in Gush Dan. On average, these apartments sold for 16% less than they did in the third quarter, averaging NIS 1.79 million. In Tel Aviv, the 3.5- to 4-room apartments sold in the fourth quarter cost 14% less than those sold in the third quarter, averaging NIS 2.13 million. However, the 4- to 5-room Tel Aviv apartments sold last quarter cost 8% more than those sold in the third quarter.
Home prices in Jerusalem increased 0.5% on average; those in Haifa increased 1%.
One of the main findings from the State Revenue Administration's report is that the freeze in home sales started creating problems for sellers. People who purchased a new apartment before selling their old one found themselves stuck with two homes.
There were 15,000 of these homes "in waiting" as of January.
So who was buying homes in the final months of last year? Home purchases by young couples were down 25% last year, even if the sharp drop halted by the final quarter. Purchases by homeowners looking to upgrade were up 15% last year.
The most notable drop was in purchases by investors, which were down by a sharp 51% for the fourth quarter compared to the fourth quarter of 2010. Investors bought 21,800 homes in 2011, the lowest figure since 2004.
Foreigners also largely vanished from the market, accounting for 4% of all purchases in the final quarter of last year, compared to 21% in the previous quarter and 19% in the final quarter of 2010.
