Investors are buying fewer apartments in Israel and selling more of them, according to a report by the Finance Ministry published on Sunday.

They bought 30 percent fewer new apartments in January, compared with the same month last year and 18% less than in December. And they sold 3,000 in January — a quarter more than in December.

Sales were particularly noticeable among investors who owned three or more properties, the report said.

The figures coincide with an article in the latest issue of the Economist magazine, which said that property prices in Israel soared by 82.1% between 2006 and 2016 in inflation-adjusted terms, representing the biggest increase in the world second only to Hong Kong.

A view of the upscale Mamila neighborhood in Jerusalem, on October 27, 2015. Most of the luxury apartments are owned by foreign residents or by Israelis who use them as vacation homes. (Lior Mizrahi/Flash90)

A view of the upscale Mamila neighborhood in Jerusalem, on October 27, 2015. (Lior Mizrahi/Flash90)

But the picture has changed markedly since June, when investors bought more apartments than they sold, the Finance Ministry report shows.

And while investors represented 25% of all buyers last March, that proportion had dropped in December to just 16%, holding steady (at 16.5%) through January.

The report does not specify the breakdown between overseas and Israeli investors.

In total, investors purchased 1,600 apartments in January, both new and second-hand, which is down just 2% on December, but 18% less than in January last year.

The report by the ministry’s chief economist, Yoel Naveh, attributes the changes in part to the 1% tax levied on owners of three or more homes that was introduced as part of the 2017-2018 budget, and came into force at the start of this year.

The tax forms part of Finance Minister Moshe Kahlon’s campaign to make housing in Israel affordable, particularly for the poor and young couples.

Finance Minister Moshe Kahlon speaks at a conference on how to develop northern Israel, in Ma’alot-Tarshiha, December 26, 2016. (Meir Vaknin/Flash90)

On an annual basis, owners of three properties or more must pay tax equal to 1% of the property’s value, but capped at NIS 18,000 per year.

The value is based on a complicated formula, weighed for factors such as location and size.

The law’s timetable specifies that owners of three apartments or more must declare their properties to the tax authorities by March 31 and to pay it, in two equal installments, the first on June 30.

The law has been heavily criticized by average-income Israelis who say they are being unfairly penalized for having invested in property to improve their financial situation rather than putting their savings into banks or investments.

Israel’s Supreme Court justices on April 17, 2016. (Yonatan Sindel/Flash90)

On Sunday, the Supreme Court issued a temporary injunction, ordering the government and Knesset to detail by March 23 why the law should not be canceled.

It also ordered them to respond by Wednesday to a petition that asked to delay the date on which properties have to be declared to the tax authorities by 90 days.

In October, the Finance Ministry said there were 38,232 families holding three homes, and more than 54,000 of holders of three or more homes. Twenty-one families in the country own more than 20 apartments each.

The third homes made up 12% of the rentals market. The tax would be enforced on 80,000 homes defined as a third house or more, the ministry said.

Overall, January saw the sale of 9,700 apartments — new and second-hand — the Finance Ministry report shows.

That was 5% less than in December, but 3% more than January of last year.

The average price of a three-bedroom apartment in Tel Aviv is close to $1 million (Miriam Alster/Flash90)

The rate of purchase by first-time buyers was 6% less than in December, with the biggest drops registered among first-time buyers choosing new apartments.

The report attributed that finding in part to the tax on multiple apartments, and in part to young couples waiting for a Finance Ministry affordable housing program to take root.

The program allows developers to receive land at cut-rate prices and to sell apartments at a discount to qualified first-time buyers, who are selected by lottery.

The report suggests that affordable housing building starts may have been delayed partly by local authority bureaucracy and delays in the issuing of building permits to contractors.

Finance Minister Moshe Kahlon, center, with Finance Ministry director general Shai Babad, right, and ministry budget head Amir Levi as they present the proposal for the state budget for 2015 in Jerusalem, August 2, 2015. (Yonatan Sindel/Flash90)

The high cost of housing has become a central political issue in Israel, with young families claiming they are being priced out of home ownership or even rentals in the economic center of the country.

In 2011, mass social protests broke out across Israel calling on the government to work to lower house prices and the cost of living.

Along with the tax on multiple properties,the government last year allowed cities to convert land zoned for industry to housing and made permanent a rule which allows local councils to increase taxes on so-called ghost apartments, which are occupied for three months or less annually, the Haaretz newspaper reported.