The decline in housing sales continues; however, this trend is expected to reverse when certainty returns to the housing market
Housing sales in the public and private sectors equaled 1,316 units in August (excluding seasonality), reflecting a decline of the annual sales rate to 15,800 new units. August’s sales figure is 42% below that from the corresponding month of 2013, and is also below the long-term average (from 2007), which stands at an annual rate of 20,000 units. As we noted in previous months, the decline in housing sales began in the third quarter of last year, and stems primarily from expectations among households that housing prices will decline after government plans in the housing sector will be implemented. As is known, the current government plan being debated is the 0% VAT plan. Since the Knesset (parliament) approved the first reading of the VAT law proposal, a number of discussions have been held in the Finance Committee of the Knesset; however, a final decision has still not been made regarding the approval of the law and its contents, and in the 2015 budget proposal there is no mention of the VAT law.
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