An attempt by Finance Minister Moshe Kahlon to stimulate the housing sector while making it easier for first-time home owners to buy an apartment is failing, catastrophically, with nearly all figures dropping in all categories.
Fifteen percent fewer homes were purchased in the second quarter of this year than in the same period last year. There were 12 percent fewer purchases of homes by young couples compared to the first quarter of this year, and compared with the same period in 2016, according to the real estate review published last week by the Finance Ministry.
According to Globes, the ministry report states that “sales are nearing an all-time low” in the Jerusalem and Tel Aviv areas if sales in the buyer fixed price framework are excluded.
Moreover, investors purchased only 4,000 housing units in the second quarter – one of the lowest figures since the year 2000.
Sales of housing units by investors fell by nine percent in the second quarter, compared with the same period in 2016, in places like Tel Aviv, Netanya and Jerusalem.
Minister Kachlon’s plan to help first-time home buyers involved a hotly debated “multiple home tax” that would have hit investors and parents who buy homes for their children as they marry. Ultimately, the Supreme Court determined the tax was illegal and struck it down.
But even though it was never passed, the plan – which Kachlon says he’ll keep working to advance anyway — prompted investors to back away from the market instead. It succeeded in slowing sales, while doing little to reduce prices for the lower income young couples Kachlon was hoping to help.
The drop in the sale of new housing units continued in the second quarter of 2017, and in particular those at market price, according to Globes. Moreover, just 390 housing units were purchased by overseas residents in the second quarter – the lowest level since the first quarter of 2003, during the second intifada.
“There’s also less real estate advertising for investors,” said one advertising executive who spoke with JewishPress.com on condition of anonymity, “because they aren’t buying. Kachlon chilled the market.”