July 2024 was a hot month for the residential real estate market. Data published last Thursday by the chief economist of the Ministry of Finance shows that last July, 8,909 apartments were purchased - a sharp increase of 29% compared to July 2023, which was one of the weakest months in the housing market since the early 2000s, amid rising interest rates and judicial reforms. The increase in the volume of transactions in July was also recorded compared to the previous June, with an 8% rise.
One of the fascinating points in the review is the dramatic increase in the sale of new apartments. A total of 3,770 new apartments were sold in July 2024, a 51% increase compared to July 2023. The free market also showed impressive growth, with a 61% increase in sales compared to last year.
The second-hand apartment market also showed a nice rise in July 2024, with a total of 5,139 transactions – a 17% increase compared to July 2023. Despite the increase, it is still one of the lowest levels recorded in this market in recent decades.
Investors are Returning to the Market
One of the surprises in July 2024 was the increase in investor activity in the market. After a period of declining real estate investment purchases due to tax increases and regulations that limited investment profitability, there was a 36% jump in apartment purchases by investors compared to July 2023.
In total, 1,390 apartments were sold to investors in July, accounting for about 5% of total market transactions. It should be noted that the increase does not signal a full return of investors to the market as seen at the peak before the tax hikes in 2021, but it marks a shift in the trend after a period of declining purchase volumes.
First-Time Home Buyers are Breaking Demand Records
A standout segment showing significant recovery is first-time home buyers. In July 2024, a record number of 5,115 apartments were purchased by first-time buyers – the highest level since March 2022.
This marks a 32% increase compared to July 2023, with the Be’er Sheva area leading sales, as first-time buyers purchased 839 apartments. The reason for these impressive numbers is likely due to attractive financing offers made by contractors, aimed at encouraging purchases during a period of rising interest rates and a general economic slowdown.