A year later: Sharp increase in apartment purchases in July

July 2024 was a hot month in the residential real estate market. Data released on September 12 by the chief economist at the Ministry of Finance shows that during the past July, some 8,909 apartments were purchased – a sharp 29% increase 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 reform. The growth in transaction volume in July was also recorded compared to the previous June, with an 8% increase. 

One of the fascinating points in the review is the dramatic rise in new apartment sales. The total number of new apartments sold in July 2024 reached 3,770, 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 saw a notable increase in July 2024, with a total of 5,139 transactions – a 17% increase compared to July 2023. Despite the growth, this remains 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 decline in investment property purchases following tax hikes and regulations limiting investment profitability, July saw a 36% jump in purchases by investors compared to July 2023. 

In total, there were 1,390 apartments sold to investors in July, meaning about 5% of all transactions in the market. It should be noted that this rise 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 trend after a period of declining purchases.

First-Time Homebuyers Break Demand Records

A prominent segment showing significant recovery is first-time homebuyers. July 2024 saw a record number of purchases by first-time buyers – 5,115 apartments, the highest level since March 2022. 

This represents a 32% increase compared to July 2023, with the Beersheva area leading in sales, having 839 apartments bought by first-time buyers. The impressive data is likely due to attractive financing deals offered by developers, intended to encourage purchases during a period of rising interest rates and a general economic slowdown.