The Residential Property Price Index (RPPI) – Third Quarter 2023
A slight decrease in the index value
The PMA has released the results of its Residential Property Price Index in Palestine (RPPI) for the third quarter of 20231, which revealed a slight decrease of 0.4% in the overall index, compared to the previous quarter, to 108.7 points2. This comes in light of minor changes that occurred in the two sub-indices. The house price index has decreased by 0.6%, recording 110.1 points, while the index of apartments has decreased only by 0.2%, recording 106.7 points. While compared to the corresponding quarter of 2022, the index decreased by 4.5%.
The figure below shows that the index’s movements during the third quarter of 2023 were close to those of 2021 but lower than in the same period in 2022. Owing to the weak demand for real estate market, amidst increasing uncertainty locally and globally, and its impact on consumer and investor confidence, especially when the Palestinian cities suffer from policies of deliberate closure by the occupation, in addition to the rising price levels in general, and declining the purchasing power of individuals and families.
It is worth mentioning that the specification of the residential property plays a key role in determining its price. During the third quarter, 63% of the apartments for sale were new, with an average area of about 169 m2, and mainly contained three bedrooms, three bathrooms, and a balcony. As for houses, the average construction area of houses for sale during the quarter is about 270 m2, almost half of them are new and consist of more than three bedrooms and at least three bathrooms. Moreover, the prices of residential properties are affected by other factors besides the abovementioned, headed by the price of the land on which the property is located, as well as the geographical location and neighborhood.
It should be noted that PMA issues and publishes the RPPI quarterly, to monitor the real estate market and price fluctuations to avoid possible price bubbles. Moreover, the index can be used as an input for economic policies, especially macroprudential policies, due to its important role in individual decisions of consumption, savings, and investment.
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