The PMA Residential Property Price Index – Second Quarter 2020 An increase in the overall index
The PMA has released the results of its Residential Property Price Index in Palestine for the second quarter of 2021[1]. The results show that the overall index (which includes the sub-indices of houses and apartments) increased by 2.7 percent during this period compared to the previous quarter, registering 113.1 points. This increment was mainly due to a rise in houses' index, which rose by 3.8 percent to 118.9 points during the same period. Meanwhile, apartments' index slightly increased by 0.9 percent, recording 104.6 points.
It is important to note that selling and purchasing of apartments in Palestine is very dynamic compared to houses, for several reasons. One main reason behind this is the supply of apartments, which significantly exceeds the supply of houses. Real estate developers focus more on developing this kind of dwelling units, mainly in city centers, as apartments' prices are more affordable for citizens in light of limited land. During the second quarter, the price index of apartments increased in the West Bank, while it declined in Gaza Strip.
Figure1: Residential Property Price index-Palestine
Source: PMA (September 2021), Residential property price index in Palestine. Second quarter 2021.
2018 Q1 =100
Usually, the announced prices of a property affected by many factors, most prominently: the price of the land on which the property is located, the geographical location and neighborhood, type (apartment or house). In addition to the specifications of the property itself, such as the type of the property (apartment or house), the nature of the property (new or used), the area of the property, the area of land on which the property is located (in the case of houses). Adding to that, the age of the property, number of bedrooms and bathrooms, services attached to the property, such as central heating, parking, elevator (in the case of apartments), and others.
By constructing this index, the PMA aims at monitoring changes and fluctuations in the prices of residential properties, to use as an input for economic policies, especially macro prudential policies, taking into account their important influence on consumption, savings and investment decisions[2].
Table 1: Residential Property Price index-Palestine
|
Period
|
|
Apartments
|
Houses
|
Overall
|
|
|
Index
(points)
|
Percent change (%, q o q)
|
Index
(points)
|
Percent change (%, q o q)
|
Index
(points)
|
Percent change (%, q o q)
|
|
2018
|
Q1
|
100.0
|
|
100.0
|
|
100.0
|
|
|
Q2
|
103.3
|
3.3
|
104.8
|
4.8
|
104.2
|
4.2
|
|
Q3
|
98.2
|
-4.9
|
104.6
|
-0.2
|
102.0
|
-2.1
|
|
Q4
|
99.9
|
1.7
|
96.2
|
-8.0
|
97.7
|
-4.2
|
|
average
|
100.4
|
-
|
101.4
|
-
|
101.0
|
-
|
|
2019
|
Q1
|
96.9
|
-3.0
|
97.1
|
0.9
|
97.0
|
-0.7
|
|
Q2
|
99.4
|
2.6
|
99.7
|
2.7
|
99.6
|
2.7
|
|
Q3
|
98.6
|
-0.8
|
109.2
|
9.5
|
104.9
|
5.3
|
|
Q4
|
96.7
|
-1.9
|
110.5
|
1.2
|
104.9
|
0.0
|
|
average
|
97.9
|
-2.5
|
104.1
|
2.7
|
101.6
|
0.6
|
|
2020
|
Q1
|
95.1
|
-1.7
|
113.0
|
2.3
|
105.8
|
0.8
|
|
Q2
|
97.3
|
2.3
|
117.9
|
4.3
|
109.6
|
3.6
|
|
Q3
|
96.9
|
-0.4
|
100.0
|
-15.2
|
98.8
|
-9.9
|
|
Q4
|
97.4
|
0.5
|
112.0
|
12.0
|
106.1
|
7.4
|
|
average
|
96.7
|
-1.2
|
110.7
|
6.3
|
104.1
|
2.5
|
|
2021
|
Q1
|
103.7
|
6.5
|
114.5
|
2.2
|
110.1
|
3.8
|
|
Q2
|
104.6
|
0.9
|
118.9
|
3.8
|
113.1
|
2.7
|
Source: PMA (September 2021), Residential property price index in Palestine. Second quarter 2021.
2018 Q1 =100.
[1] For more information about the methodology, please see “Residential Property Price Index for Palestine”, working paper, PMA 2021, on PMA website, www.pma.ps.
[2] In 2018, the PMA started building an index for residential property prices in Palestine in accordance with the best international standards and practices, using the offer price, given the lack of data on the actual selling prices from any official entity.
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