In the third quarter of 2023, the average price of surveyed apartments saw a minor decline of 1.2% across the country compared to the preceding quarter. However, when looking at annual trends, several cities stood out with abnormal price hikes, with Netanya leading the way with a staggering 28% increase in average apartment prices compared to the previous year.
These findings come from a report on the third-quarter apartment price changes, released by Ohad Danos, former chairman of The Real Estate Appraisers Association in Israel.
Additionally, the report highlights a decline in transaction volume of approximately 21% compared to the second quarter and a decrease of about 13% compared to the same quarter last year. The analysis was based on the examination of 1,935 transactions in 16 different cities, which may not represent all areas in the country. The focus was on four-room apartments within a saturated construction market, chosen as an indicator of overall variation in the apartment market due to their prevalence and relatively low variability.
On a quarterly basis, a decline was noted in nine cities.
The results of the aforementioned review indicate a slight 1.2% decrease in average apartment prices in the surveyed cities during the third quarter of 2023, compared to the previous quarter.
- Nine cities experienced a decrease: Ashdod, Ashkelon, Herzliya, Beer Sheva, Kfar Saba, Holon, Ramla, Rehovot, and Modi'in.
- Three cities saw no change: Eilat, Rishon Lezion, and Jerusalem.
- Four cities witnessed an increase: Netanya, Tel Aviv, Petah Tikva, and Haifa.
Apart from price trends, each city displayed a typical level of price variation, reflecting differences in demand and physical characteristics across different areas.
Unusual spikes in prices are observed in Netanya and Jerusalem, while prices are declining in the surrounding areas.
In contrast to the second quarter, the third quarter saw no significant price increases and the decreases were relatively moderate. On an annual level, Tel Aviv showed an average increase of 11%, driven by fewer transactions but in higher-priced properties.
Netanya, however, experienced a dramatic average price increase of 28%, followed by Jerusalem with an 18% rise. Beer Sheva continued to witness a decline.
The total amount of mortgages taken by the public in September 2023 was approximately NIS 5.488 billion, about 29% lower than in September 2022. Ohad Danos stated, "We are currently in a trend of high prices that is expected to strengthen further.
This is accompanied by an improvement in transaction volume compared to the second quarter and the market's belief that significant parts of the proposed legal reform will not be enacted."