Home Sales Soared at End of 2015 After Brief Respite

The Israeli housing market heated up again at the end of last year after a brief respite, with 2015 ending up a record year for the number of home sales, the Finance Ministry said Sunday.

In December, the number of new homes purchased jumped 18% from November, although it was down slightly from a year ago. The biggest increases were in the north of the Sharon area in the center of the country and in Jerusalem, where sales of new homes soared 80%.

In December, sales of existing homes inched up 2% from the month before, but in November they had surged 31% from October. Haifa saw the biggest increases, with a 54% increase from November to December, the treasury said.

Israelis have been storming the real estate market amid rising prices and a lack of confidence in the government’s ability to stem them, even though Finance Minister Moshe Kahlon has made this a top priority. Prices rose about 8% last year, according to the Central Bureau of Statistics.

On Sunday, the Housing and Construction Ministry said more than 1,000 people had registered for a lottery to participate in the first project to be built under Kahlon’s Machir Mishtaken (Target Price) program. Only 232 homes are being built for this project in the northern town of Afula, so the ratio of applicants is already four times the number of homes.

The lottery is the first under the program, which aims to hold lotteries for 25,000 homes over the year. The Target Price program offers builders land at less than the market price if they pass the discount on to home buyers.

In addition to soaring home sales, the Finance Ministry found that property investors are gradually back in the market after being briefly deterred in the middle of last year. This happened when Kahlon raised purchase taxes in an effort to deter investors from crowding out people simply looking for a home to live in.

The treasury said investors were focusing especially on Tel Aviv, where they accounted for 40% of all home sales in December, up from 34% in November. Apparently investors concluded that rising property rises would more than offset the effect of higher taxes.