The housing price index published on Friday by the Central Bureau of Statistics included a surprise that no one thought to point out — that home prices were unchanged from October 2016 through February 2017, the last month for which data is available.
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According to the statistics agency, after remaining steady in November, prices dropped 0.5% in December and then increased by 0.5% in January and February put together. Meaning, they ultimately didn’t change for that whole four-month period. To that one must add that the statistics for December to February are not considered final, meaning that they could be revised significantly.
However, if they are accurate, then this means that the annual figure that is so frequently cited is It’s true that prices rose 6% from February 2016 through February of this year, but that doesn’t entirely reflect the trend. Namely, prices increased 6% between February and October of last year and then they stopped.
Over the past decade, a four-month halt in the rise of home prices is a genuine event, but it’s too early to say that government policies designed to halt price increases have succeeded. However, what the statistics bureau data does show us is that we’re in the midst of something happening, and all market players need to be paying attention — builders, real estate agents, home buyers and sellers, and also journalists.
Another indication that something is happening is the dramatic drop in the number of home sales in 2016. TheMarker’s market forecasts, published right before Passover, indicate that prices are frozen in a significant number of cities.
The last time that home prices halted like this was when then-Finance Minister Yair Lapid was working on plans to unroll a 0% purchase tax on homes for first-time buyers, driving that entire market segment to delay plans to buy by nearly a year. Once it became clear that the plan would never be introduced, the buyers came rushing back, sending prices spiking.
The current halt in prices is different, and not just because it the result of policies that are already in effect or in the process of being introduced — namely the Mehir Lemishtaken (buyer’s price) program, discounting prices for first-time buyers, as well as a new tax on the owners of three or more apartments. But this doesn’t guarantee that we’re about to see real price declines, or that we’re in the middle of a plateau before further increases. We’ll know whether the market trend is changing only in the months to come.