53% of northern residents who bought a home this year chose to leave the North

Will northern residents return to their homes? A report from the Chief Economist at the Ministry of Finance was published on August 13t, highlighting a worrying trend in the northern housing market. 

This is the first analysis of its kind in the report, conducted among residents evacuated from the North, South, and Gaza border region, following the evacuation of settlements from these areas during the "Swords of Iron" war. 

Overall, the analysis shows an 8% decrease in home purchases by residents of these evacuated settlements in the first half of the year compared to the same period last year, in contrast to a 26% increase in total transactions nationwide.

Are residents of the northern conflict zone moving to Haifa?

The most interesting finding from this analysis: Among those who did buy a home in the first half of the year, there is a sharp decline in the percentage of northern evacuees who purchased a home in the north – from 76% last year to just 43% this year. Viewed from another perspective, more than half of the northern evacuees who bought a home in the first half of the year chose to leave their northern communities and purchase a home further away from the northern border.

Simultaneously, there was a tripling of the percentage of homebuyers from the North who purchased homes in the Haifa district, from just 9% last year to 28% in the first half of this year – this, despite the fact that Haifa was a major target during the Second Lebanon War. This may reflect, among other things, the fear of northern border residents to continue living close to the border. 

Additionally, there was an increase in purchases by northern border residents in Tel Aviv and central districts, likely by those who can afford the significantly higher prices in central cities compared to Haifa.

A similar analysis conducted among residents evacuated from the South, including from Ofakim and Netivot, found that while there was also a decline in the percentage of southern evacuees who purchased homes in the southern district, this decline was significantly less pronounced than in the North. The percentage of southern evacuees purchasing homes in the southern district dropped from 93% last year to 87% this year. 

Additionally, it is interesting to note that the number of homes purchased by residents from the evacuated southern settlements (excluding Ofakim and Netivot) was more than double the number purchased by northern evacuees –586 compared to 228, respectively.

Other interesting findings from the analysis:

• A noticeable increase in the pace of home purchases was observed among residents of the Gaza border area in the last two months (May-June), with the number of homes purchased in June being the highest since the beginning of the year. In contrast, northern evacuees saw a more moderate increase in purchases in the last two months. 

• A quarter of the northern evacuees who bought a home in the first half of the year have yet to sell their previous home (and have declared their intention to sell it – a "home on hold"). Among Gaza border residents, a slightly lower rate of 21% was recorded. 

• 17% of the homes purchased by northern evacuees in the first half of the year were for investment ("an additional home"). This rate is similar to the national average. Conversely, only 10% of the homes purchased by Gaza border residents in the first half of the year were for investment.

• 43% of the homes purchased by northern evacuees in the first half of the year were new homes. Among Gaza border residents, 57% were new.