22/10/2013
Home sellers not cutting asking prices
"Globes"-Homeless Index: Homebuyers willing to settle for a modest apartment can still find one for less than NIS 1 million in high-demand areas.
There was no change in the momentum in the second-hand housing market in holiday-filled September 2013, and home sellers were in no hurry to lower asking prices. According to the Homeless classified ads site, except for some weakness in the market for four-room apartments (for which prices fell in eight of the fifteen areas examined), there was no general drop in prices for apartments of any kind in any of the areas examined. In fact, asking prices for three, four, and five-room apartments rose in four areas: Tel Aviv, Rishon LeZion, Acre-Nahariya, and Modiin.
According to Ministry of Housing and Construction figures, the average price for first-time buyers of a second-hand apartment in the second quarter was NIS 1 million (and NIS 1.09 million for a new apartment). According to the asking prices on Homeless, which are naturally higher than the closing price, at this price it is only possible to buy a four-room apartment in the remote periphery, and five-room apartments are out of the equation.
Nonetheless, young couples and families who decide to buy a modest three-room apartment can find asking prices of less than NIS 1 million in city centers in high-demand areas, such as Petah Tikva (NIS 969,000) and Netanya (NIS 863,000).
Rents, especially for small apartments, are continuing to fall, now that students returning to university have apparently found accommodations for the coming year (even if it is at their parents' home). Asking rents rose in only four of the fifteen areas examined.
Methodology
In contrast to other online classified ad sites, Homeless charges for all ads it airs, which makes sellers quote prices in accordance with their real expectations and avoids freeloaders. The index gives two figures: the asking price of the apartment, and the average rental yield in each area.
The listed rent is the gross rent. A month without a tenant, maintenance expenses, taxes (assuming that the rent is more than NIS 4,500 a month), and other costs can reduce the return by about 10% on average.
