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World Jewish News
Diaspora Jews' Israel real estate purchases plummeted in 2008
04.05.2009
The global economic crisis has badly hurt property sales to foreign residents. State Revenues Authority data shows that in the fourth quarter of 2008, there was a 40% decline in the number of sales compared to the third quarter - and a 60% decline in comparison with the fourth quarter of 2007.
Much has been written and said about the "invasion" of Diaspora Jews in Israel, but so far few official figures have been released concerning the exact number of real-estate deals they struck or the prices they paid. Apartment purchases by foreign residents accounted for 5% of the overall sales in the country, but have been concentrated in a few specific areas, so their impact has been significant.
The State Revenues Authority's figures vis-a-vis real-estate purchases by foreign residents from 2002 to 2008 show that their rush to buy apartments in Israel began to gain momentum in 2005. That year, foreign residents bought a record 991 properties in the Netanya region, which includes Herzliya Pituah and Ra'anana. In 2006 the record-holder was Jerusalem, with 1,500 sales to Diaspora Jews; sales in Tel Aviv reached a peak in 2007, of 921 properties.
Jerusalem remains the favorite among foreign residents, with little competition from other cities. Of the 25,600 apartment purchases in the country by foreign residents in 2006-2008, about 7,200 were in Jerusalem. In the Sharon region (including Netanya, Herzliya and Ra'anana), there were 4,600 real-estate transactions involving foreign buyers, and in Tel Aviv, 4,300. The average price of apartments bought by Diaspora Jews during these years was over NIS 1 million, and as the number of transactions declined, starting in 2007, the average price began to rise.
The most lucrative year was 2007, when foreign residents spent NIS 12.7 billion on apartments in Jerusalem, Tel Aviv and the Netanya region. In 2008 that figure shrank to just NIS 8.1 billion, dipping below NIS 10 billion for the first time in 3 years. Even so, in the second quarter of 2008 the average price for apartments purchased by foreign residents soared to a record NIS 2.31 million in Jerusalem and NIS 2.33 million in Tel Aviv. The Sharon region holds the record for the highest average prices in general, however, as properties there topped NIS 2 million in 2007.
Thus, even though foreign residents bought more apartments in Jerusalem than in any other city, prices there were not the highest. In 2003, for example, the average price of apartments purchased by foreign residents was NIS 1.3 million. By 2008, the average price had risen to NIS 1.8 million. Although this is a significant increase, it is a far cry from the hysterical descriptions that were occasionally published in the media.
The impact of the influx of foreign buyers in recent years can be seen when comparing the average prices they pay for apartments to those paid by local buyers. In 2007, for example, foreign residents paid an average of NIS 1.6 million for places they bought in Tel Aviv, while the average price paid by Israelis was NIS 1 million. In terms of the national average, foreign residents paid NIS 1.4 million for apartments, while local people paid NIS 750,000.
Israel's third-largest city, Haifa, has not managed recently to attract significant numbers of foreign resident buyers: Over the past 8 years, just 546 of them bought properties in Haifa. However, 2007 was a record year, with foreign residents purchasing 129 apartments.
There is no doubt that foreign residents were in recent years more attracted to the Ashdod marina than to beachfront properties in Haifa. In the Rehovot region, which includes Ashdod, 3,800 apartments were sold to foreign residents in 2002-2008 - an impressive number relative to Tel Aviv (4,300 apartments) and the Sharon region (4,600). The good years for Ashdod began relatively early, in 2005, when a record 991 apartments were sold to foreign residents. Foreign interest in the seaside city continued in 2006 and 2007, when Diaspora Jews purchased 921 and 862 apartments, respectively. In 2008 sales to foreign residents plunged to just 522 apartments, and real-estate prices began to decline - in the marina area first.
By Raz Smolsky
Источник: Haaretz
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