BMBY Reports a Significant Increase in New Apartment Sales in December
Israel recorded a significant increase in new apartment sales in December 2024, with a 59% jump compared to the previous month.
A new record for new apartment sales in Israel was set in December 2024, according to data from BMBY Software Systems, as published in an article on the Real Estate Center website. BMBY reported a significant 59% increase in transactions compared to November, with 2,444 contracts signed during December. This marks the highest point in real estate activity in the past two years, greatly influencing existing market trends.
BMBY is a provider of CRM software for real estate companies. Its system, installed at thousands of sales offices across Israel, collects and analyzes inquiries received by sales offices. This allows the company to measure demand levels and the volume of transactions for purchasing new apartments in real-time on a daily basis. While the number of transactions recorded in the system does not cover the entire market, it serves as a representative sample of market trends.
Increase in Transactions Driven by VAT Hike and Ceasefire in the North
The rise in transactions is attributed to several key factors. Mark Zeevi, founder of BMBY, explained:
“In October 2023, following the outbreak of the ‘Swords of Iron War,’ there was a sharp decline in transactions. However, two months later, we observed an upward trend in transactions that continued through the first half of 2024. Contributing factors included developers’ financing campaigns and market expectations of further price increases. The third quarter saw a slight drop in transactions, primarily due to the holidays and actions taken by the Bank of Israel to curb financing campaigns. However, in December, we witnessed a sharp rise in transactions to a new peak.”
Zeevi added:
“Conversations with sales managers at major companies revealed that the primary reason for the increase was the VAT hike effective January 1, which prompted buyers already in the process to expedite contract signings. Additionally, the ceasefire at the end of November brought calm to the northern region, encouraging a return to sales offices. Year-end promotional campaigns by developers also accelerated transactions, driven by concerns that financing campaigns allowing purchases with particularly low equity might diminish.”
Attention to Purchase Trends Moving Forward
Zeevi cautioned, however, that when examining demand (leads) graphs, there wasn’t a similar rise in inquiries compared to signed contracts. This suggests that December’s sales peak may not be replicated in January or February.
Last-Minute Deals: Year-End Campaigns Drove the Market
Ohad Asraf, CEO and owner of Ari Housing Group, which markets new apartments for leading developers, confirmed the trend in the article:
“In December, there was a significant increase in transactions, primarily due to accelerated deals ahead of the VAT hike. While the VAT hike doesn’t significantly impact the overall cost, as buyers don’t pay the full amount upon signing and future payments absorb the increase, it served as a catalyst for deals already nearing completion. Combined with year-end campaigns, some developers even offered to absorb the VAT increase on the entire apartment.”
Asraf emphasized that most deals were signed in the last days of the month:
“This created pressure at sales offices and mortgage banks, which struggled to handle the volume. Our sales teams worked from 7 a.m. until midnight. It was an extraordinary month by any standard, with instances where clients registered interest on December 30 and signed contracts on December 31.”
Nir Shmol, CEO of Snir Real Estate Marketing, a leading company for marketing new projects, also noted in the article:
“The last week of December resembled past rushes, such as when the purchase tax for investors rose from 5% to 8%. Although the VAT increase from 17% to 18% isn’t critical, as buyers today pay only a small amount upfront, the phenomenon of a flood of deals in December was mainly driven by market expectations. Buyers wanted to secure a deal for an apartment that will be ready in three or four years, while prices are expected to rise, mortgage rates may fall, and VAT could potentially decrease. In practice, we stayed in sales offices until late at night, with buyers rushing to banks to pay before the year ended.”