New-home Sales Declined 7% in 6 Months to 20,110

New housing units up for sale has been slowly but quite steadily shrinking.

Nimrod Bousso
Nimrod Bousso
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Nimrod Bousso
Nimrod Bousso

The number of new housing units up for sale has been slowly but quite steadily shrinking.

At the end of November 2012, the number of new units on offer was 20,110 - 7% less than in April, when the figure was 21,650, the Central Bureau of Statistics reported yesterday as part of its monthly housing survey.

The number of new residences was 1% higher in November 2011. While the differences in available new housing numbers may seem small, they are worrying as the number of new housing starts has also been shrinking throughout 2012.

Even though the official numbers have yet to be released, estimates are that the final figure of new housing starts for all of 2012 will not pass the 40,000 mark. In comparison, there were 45,000 such starts in 2011. This means fewer new units will be coming on the market in coming months, and the supply is expected to shrink further.

The drop in housing starts and new homes is yet another slap in the face to the government's endless announcements about finding a solution to high - and rising - housing prices. The governor of the Bank of Israel, Stanley Fischer, has said a number of times recently that the supply of housing is the major problem and criticized the government for not taking effective action to increase the housing supply.

The big change in the trend came in June 2012, when the numbers began to shrink steadily. Fully 57% of the units on offer today are in the center of the country, including Tel Aviv, while 12% are in the Jerusalem region and 14% in Haifa and the north.

Interestingly enough, the numbers in the Tel Aviv and central regions are actually rising, up about 2% over the past year.

The public bought 1,950 new residences in November. Of the new dwellings purchased in January-to-November period, 13,760 were privately initiated construction, while 5,740 were initiated by the public sector.

There was a 11% rise in the number of new dwellings sold in this 11-month period of last year compared to the same period of 2011.

The sale of new homes rose an average of 2.7% per month from October 2011 through June 2012, while as of July this figure fell to an average of 0.7%, reported the statistics bureau. Sales fell at an average pace of 3% a month before that, from December 2010 through September 2011.

Residential building project in Tel Aviv.Credit: Ofer Vaknin