Meitav: Housing market set to cool down

  LAST UPDATED: 06/05/2011 16:19 AN AVERAGE 100-square-meter apartment in Hod Hasharon costs around NIS 1.5 million Photo: Courtesy "This week, data was published about the domestic real estate market that show a real potential for cooling down in the sector, mainly referring to apartment prices," claimed Meitav Investment House chief economist and strategist Ron Eichel, in a survey on Sunday. Eichel was referring to data regarding building starts and finishes in the first quarter of the year that were published last week, and predicts that the real estate apartment market will be flooded within two years. Eichel said he expected prices to even out and perhaps even to decrease.

Sources at Meitav forecast that the supply of apartments will increase within two years, a claim that is based on data regarding building starts and finishes in the first quarter of 2011, which were published last Tuesday. "The number of private building starts means that prices may have reached their peak," the summary stated. "The number of building starts surpassed 10,000 units in the first quarter, in other words, a rate of 40,000 units a year." In conjunction with public sector building, the national rate of building starts is about 44,000 apartments a year.

Meitav sources also believed that, according to current rates of building starts and finishes, the real estate market is expected to flood within the next two years, at levels similar to those last seen in 1999-2000. "Over the last twenty years, the length of time needed to complete an average apartment is between 22 and 26 months. In other words, the number of building finishes expected in the next two years is extremely high."

Sources at Meitav also noted that there was a decrease in demand for apartments in April, which they believe is indicative of an overall decrease in demand, which could be a stabilizing factor in the market: "The central area (excluding Tel Aviv) continues to draw our attention, since it comprises about a third of all real estate activity. In general, the numbers indicate that over the last few months, there has been a decrease in demand for apartments," the survey concluded.

function changeCommentsUrl(newUrl){ document.getElementById('thecomments').innerHTML=''; parser=document.getElementById('thecomments');parser.innerHTML=''; FB.XFBML.parse(parser); } var thisurl =document.URL; changeCommentsUrl(thisurl); Your comment must be approved by a moderator before being published on JPost.com. Disqus users can post comments automatically.

Comments must adhere to our Talkback policy. If you believe that a comment has breached the Talkback policy, please press the flag icon to bring it to the attention of our moderation team.

Jpost.com, the online edition of the Jerusalem Post Newspaper - the most read and best-selling English-language newspaper in Israel. For analysis and opinion from Israel, the Jewish World and the Middle East. Jpost.com offers expert and in-depth reporting from Israel, the Jewish World and the Middle East, including diplomacy and defense, the Palestinian-Israeli conflict, the Arab Spring, the Mideast peace process, politics in Israel, life in Jerusalem, Israel's international affairs, Iran and its nuclear program, Syria and the Syrian civil war, Lebanon, the Palestinian Authority, the West Bank and Gaza Strip, Israel's world of business and finance, and Jewish life in Israel and the Diaspora.

View the original article here