Israeli contractor reports record year in new apartment sales
Posted on 26. Jan, 2010 by Buy-It In Israel Staff in Israel Real Estate
While Africa Israel Investments Ltd. has caused much concern among investors as the group is struggling to settle its international debt problems, its Israel real estate arm, Africa Israel Residences, reported a record sales year in 2009.
In 2009 the volume of apartment sales in Israel surged by 60 percent compared with the previous year. Last year, Africa Israel Residences sold 656 residential housing units, including sales in joint projects with other companies at a total value of nearly NIS 1 billion. During the course of 2009, the price of home sales surged between 10 to 15 percent and by an average of 12 percent. Prices rose the most in Rehovot, Netanya, and Petah Tikva.
An analysis of homebuyers in the company’s projects showed that 40 percent of the buyers became interested in the purchases through current tenants and owners, friends and family members.
In 2009, Africa Israel Residences advanced its projects faster than in the year before in order to take advantage of the momentum in the rising real estate market in Israel. At the end of 2009, Africa Israel Residences had 1,572 apartments under construction compared with 862 apartments in the previous year.
However, the end of year report of the company points to a slowdown in sales in the last quarter of 2009 during which 137 housing units were sold compared with 213 units in the earlier quarter. The pace of sales has slowed down to the low level of sales in the first quarter of last year, which was a particularly low quarter in the real estate sector as a whole, during which Africa-Israel Residences sold 123 housing units.
Looking ahead to 2010, Israel real estate experts say that although conclusions can not be drawn on the basis of one weaker quarter, the next quarters need to be watched carefully. The main question is whether the slowdown will spill into this year. On the one hand the Israel real estate market has seen a continued rise in property prices over the course of last year making it more difficult for potential purchasers, in particular young couples, to be able to buy an apartment.
On the other hand, as a result of this situation competiton from the growing trend of purchasing groups of private individuals joining together to buy land and build residential housing, is expected to gain further ground, while at the same time, the government has announced a number of steps to cool down the market – although they have not yet been implemented. Projections by experts are that all of these factors could point to a continuation of the anemic demand for property in Israel seen at the end of 2009 into 2010 stemming the sharp rise in sales prices.
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