The Lapid 0% VAT program is affecting the housing market, causing a sharp decline in apartment sales in May.<\/p>\r\n
According to data from the Central Bureau of Statistics published today (Monday), in May 2014, 1,318 apartments were sold by contractors. This is a decrease of approximately 20% in the number of new apartments sold compared to the previous month, and a drop of approximately 45% compared to May 2013. This is also the lowest figure recorded for the sale of new apartments by contractors since October 2011.<\/p>\r\n
Also with regard to the overall demand for new apartments, which combines sales from contractors and construction that is not for sale, such as apartments for rent, the CBS data indicates a decrease from 3228 apartments in April to 2572 apartments in May, a decrease of approximately 20%. Compared to the corresponding month last year, this is a decrease of approximately 34% in demand for apartments.<\/p>\r\n
These figures reflect the relative slowdown that hit the new apartment market with the announcement of government initiatives to reduce the prices of new apartments, the most prominent of which is the zero VAT initiative announced by the Minister of Finance last March. This proposal is scheduled to be voted on today in the first reading in the Knesset plenum.<\/p>\r\n
According to the CBS survey, during the months of January-May 2014, a total of approximately 8,700 new apartments were sold, a quantity that reflects a decrease of 16.91% compared to the same period last year.<\/p>\r\n
The president of the Israel Builders Association, Nissim Boublil, said in response: "The data should not surprise anyone who has listened to the words of the Israel Builders Association since the announcement of the intention to launch a VAT program at a rate of 0% for first-time apartment buyers from a contractor. We warned that the announcement would lead to a stagnation of apartment sales in the market and is likened to stretching a spring, the longer it continues to be compressed, the greater its jump will be on release day.".<\/p>\r\n
\""The moment the VAT Law 0% comes into effect, it will lead to a rush on the already too small supply of apartments, and will cause apartment prices to rise. Therefore, the Knesset and the government must act immediately to determine that the date of application of the law, which is planned for September 1st, will take effect tomorrow morning.".<\/p>","protected":false},"excerpt":{"rendered":"In May, 1,318 apartments were sold from contractors - a decrease of approximately 20% in the number of new apartments sold compared to the previous month, and a drop of approximately 45% compared to May 2013 \u2022 Contractors: We warned that the announcement would lead to stagnation","protected":false},"author":53,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[2510,5664,5665,3551],"class_list":["post-44191","post","type-post","status-publish","format-standard","hentry","category-4","tag-2510","tag-5664","tag-5665","tag-3551"],"acf":[],"yoast_head":"\n