Apartment in Tel Aviv? If you are not in the top decile, there is nothing to talk about
This emerges from a study published by the Alrov Institute for Real Estate Research at Tel Aviv University, which examined the correlation between the monthly repayment capacity in the various deciles and the prices of apartments in large cities in Israel.
Between Ashkenazi
02/06/2022
Thursday, 02 June 2022, 08:08 Updated: 08:20
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The rise in interest rates announced by the Governor of the Bank of Israel, Prof. Amir Yaron, last week, is giving its signals.
This week we published in Walla a conversation with two couples who fear that the rise in interest rates - and with it the rise in the monthly mortgage repayment payment - could make it difficult for them to repay it.
Today we dive into the alarming figures and see that in the last decade there has been a steep increase in the amount of monthly mortgage repayments.
The person who collected the data is
Prof. Danny Ben-Shahar, head of the Arlov Institute for Real Estate Research at the Koller Faculty of Management at Tel Aviv University
.
Ben-Shahar tells Walla! Rooms in the twelve largest cities in Israel, so that if in 2012 the payment was about NIS 6,800 a month, today it is already close to NIS 9,000. Only 30%.
Ben-Shahar refers to another interesting statistic published in the ability to win housing index in Israel, an index that was also published by the institute and examined the data in the first quarter of 2022
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Prof. Danny Ben-Shahar, Head of the Arlov Institute for Real Estate Research at the Koller Faculty of Management at Tel Aviv University. (Photo: Micha Lubton)
The data reveal where it will be possible for different segments of the population to purchase apartments (depending on their solvency).
For example, a household in the sixth decile is able to purchase an apartment only in Be'er Sheva and Haifa (among the large cities), in a way that the monthly repayment does not exceed 30% of the household's net income.
While a household in the seventh decile is able to meet a monthly repayment at a rate that does not exceed 30% of its income in Hadera and Ashdod as well.
A household in the eighth decile can meet (in the threshold of 30% mortgage repayment for net income) also in Petah Tikva, Bat Yam, Rehovot, Bnei Brak, and Rishon Lezion.
In contrast, Jerusalem, Tel Aviv and Ramat Gan are not within the reach of households even from the eighth decile.
In fact, and following the trend of recent years, in Tel Aviv can buy an apartment with a monthly repayment that does not exceed 30% of the net income only households in the tenth decile.
In Jerusalem and Ramat Gan, the ninth will also be able to afford to buy an apartment in this way.
Gilad Neumann, financial advisor to families and businesses, Makimi Association (Photo: Itamar Neumann)
Holiday cakes or baby clothes?
The sharp rises in housing prices are affecting the pockets of us all.
Gilad Neumann, an economic consultant for families and businesses from the Makimi organization, shared with us the stories he has been hearing in recent weeks.
"As someone who meets with dozens of families a month, I have no doubt that the current situation directly affects the consumption habits and economic conduct of each and every one of us and creates significant economic pressure and difficulty.
Some families I have met in the last two weeks "Holiday or save the money and buy clothes for the child. This is not necessarily about extreme families, in the current situation it can be a dilemma that many will have to deal with. At the end of the day this is not about economic theories taught in academia, but supermarket shopping at gas stations and our bank account." .
Neumann adds: "The changes in the Bank of Israel's interest rate cause a direct change in mortgage payments but also further changes in everything related to rising prices and the cost of living. Shekel for a family of
4-5
people. Larger families also reached amounts of NIS 1,000 compared to last year.
"In dealing with an increase in expenses that will greatly affect the household and may harm the family's day-to-day running.
In conclusion, Neumann says: "It is important to note that although the change regarding mortgages is not drastic at the moment, the prime interest rate is expected to rise by up to 1.5% in the first quarter of 2023. Beyond the direct effect on the mortgage component,
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