The Marker, Gili Melnitsky, 25.04.2021

Investor purchases in February totaled 2,000 apartments, a sharp 60% increase over February last year. This emerges from a survey published today (Sunday) in the Chief Economist Division of the Ministry of Finance. As expected, the presence of investors increased against the background of the purchase tax reduction at the end of last July.
As the share of total transactions in the housing market in Israel, the share of investors in the market in February was 19.5%, six percentage points higher than in February last year, but 1.7 percentage points lower than in the previous month.

Although this is a significant growth rate in the presence of investors in the market, the rate of increase in investor acquisitions has been moderating since last November (each month compared to the corresponding period last year). In addition, for the first time since the purchase tax on investors was reduced, there has been a two-month continuous decline in these acquisitions compared to the previous month. Thus, in February, investor purchases decreased by 11% compared to January, following a decrease of 13% in January (compared to December 2020).
The most notable acquisitions of investors are made in the Beer Sheva area, with a 134% increase in investor acquisitions in this area, following growth rates higher than the national average almost continuously since the purchase tax on investors was reduced . The average salary of those who purchased an apartment for investment in February was NIS 44,000 gross per month per household.
In the last four months (November 2020-February 2021), the "inventory" of apartments by investors has increased by close to 700 apartments, after a prolonged decline in this inventory since April 2016, during which investors' inventory was reduced by 27,000 apartments.

An increase of almost 20% in purchases compared to last year

A total of 10,200 apartments were purchased in February, an increase of 10% compared to February last year and a decrease of 3% compared to the previous month. The number of transactions in the free market alone was 9,400,000, an increase of 19% compared to February last year. In the first two months of 2021, there has been a moderation in the rate of growth in free market transactions since the purchase tax on investment apartments was reduced. Compared to the previous month, there was a 5% decrease in free market transactions.
Contractors sales in February totaled 3,600, an increase of 10% compared to February last year and an increase of 6% compared to the previous month. In the free market alone, there was a sharp increase of 47% in contractors' sales compared to February last year, while compared to the previous month, these sales remained unchanged.
The total number of second-hand apartment transactions in February was 6,500, an increase of 10% compared to February last year and a decrease of 7% compared to the previous month. The Tel Aviv area continues to stand out with a sharp decline in these purchases, with this being particularly noticeable among housing developers in the city.
Meanwhile, the length of time housing developers have owned two apartments - the old one in parallel with the purchase of the new apartment - has risen, pushing housing prices up. The new situation is made possible following an amendment to legislation that came into force during the Corona period. Purchases of housing improvers in February totaled 3,300 apartments, a decrease of 5% compared to February last year. Purchases of housing improvers are the only segment that recorded a decrease in purchases in February (compared to February 2020), after six consecutive months of increase in purchases. In a geographical segmentation, it was found that the decrease in the purchases of housing improvers encompassed most of the areas, with a 35% decrease in these purchases being particularly noticeable in the Tel Aviv area.

The number of "shelf months" of the apartments sold by housing developers, who bought an apartment before they sold their previous apartment ("buyers of a waiting apartment") in February was 30 months, ten months higher than in February last year.