The Finance Ministry released fairly negative first quarter figures for Israel's real estate market on Monday, sending mixed signals on the current state of Israel's housing market when compared with other ministry reports.

The number of investors in the real estate market has dropped to its lowest level since 2002, according to the ministry’s first quarter figures, with a 20% drop in the number of apartments bought by investors between January and March of this year. The sharp decline followed consecutive increases in the preceding four quarters.

The number of apartments sold by investors in the first quarter also fell, dropping 13% compared to sales in the previous quarter and after a 41% consecutive rise in such sales over the previous four quarters combined. In addition, 25,500 apartments were purchased in Israel between January and March 2013. This figured constituted an 11% drop on apartment purchases in the preceding quarter, but was still a 13% increase over the first quarter of 2012, when the market was still affected by the shadows cast by the 2011 social justice protests.

The relevancy of the first quarter figures is open to question, however, given that the report was published four months after the quarter closed. The ministry's monthly economic survey, Orot Adumim (Red Lights), published at the beginning of July, showed that the number of apartment sales in May rose 32% compared to April, with over 12,400 apartments sold - a record going back more than a decade. The report also showed a May increase of 53% in the number of apartments purchased as investments, compared to April.

Ronny Cohen, the CEO of Eldar Group, a real estate company marketing 70 real estate development projects across Israel, discredited the value of the first quarter report. "It's a pity that the Finance Ministry is trying to distort the true situation in the real estate market and is only now publishing the first quarter figures,” he said. "The ministry is hiding the fact that during the second quarter…there was a spike in new apartment sales."

Rina Degani, CEO of the polling and market intelligence company Geocartography Knowledge Group, chalked up the first quarter results to steps taken by the government and the Bank of Israel at the end of 2012 to cool down the real estate market. "The investors will return to the market," she said.

The mixed economic data could also be explained by two specific events that occurred in the first half of the year. The Knesset elections in January may have contributed to the first quarter slow-down, as buyers and sellers wanted to see who would form the new government and the housing market-related policies they would implement. In addition, the sharp increase in the number of apartment purchases in May may have been affected by the 1% increase in the value added tax on June 1, with people deciding to buy apartments earlier than planned to save on the tax bill.