Thursday, October 10, 2013

Apartment prices in Israel

Yair Assaf-Shapira

The average price of a four room apartment in Israel is NIS 1.18 Million for a 2nd hand apartment, and NIS 1.26 M for a new one. Data refer to the second quartile of 2013 (April to June), and were compared with the second quartile of 2012. While prices of used four room apartments showed a small descent (-0.6%) over the year, prices of new apartments rose by 1.9%.

The prices represent a combination of supply and demand, which differ from city to city, and between areas in the country. In Jerusalem the prices of used and new apartments are higher (NIS 1.69 M and NIS 1.93 M respectively), and the price trends are opposite than the national ones. The used apartments' price in Jerusalem rose slightly (by 0.4%) compared to the second quartile of 2012, while the new apartments lost 3.6% of their price. Interesting to note that in Tel Aviv the prices of used four room apartments lost 12%, while in the ultra orthodox cities of Modiin Illit and Betar Illit near Jerusalem, they rose by 10%-11%.

Looking at the three room apartments (only used apartments on this market), one can observe that in most localities their prices are on the rise. In Jerusalem they rose by 3.1% during the year (compared to 0.4% in the four room apartments). Dramatic rises were recorded in Bet Shemesh (13%) and Modiin Illit (12%), as well as in various other localities. On average the prices of these apartments rose by 2.6% (compared to -0.6% in the four room market). While no three room apartments are being constructed (mainly because the profit for the entrepreneur is lower on them), it looks like the demand for them is large.



Data source: ministry of construction and housing, department of information and economic analysis