A rocket barrage to Otef - a man was seriously injured at a construction site, falls in the yards of houses/Avi Rokh
The dream of owning an apartment continues to move beyond the reach of Israeli couples and households.
The difficulties of getting an apartment are increasing even these days when the interest rate for mortgages is relatively high compared to what it was until two years ago, before the Bank of Israel started raising the interest rate.
Interest rates continue to rise.
In February of this year, the average interest rate that is not linked, that is, nominal, was 5.02% for an average period of 19 years compared to 4.93% a year earlier.
The mortgage tied to the consumer price index had an average interest rate of 3.16% for an average period of 18 years, an interest rate similar to February last year, but then it was better because it was given for an average favorable period of 21.2 years.
In February 2022, before the interest rate increases, when the Bank of Israel's interest rate was low, the non-indexed, nominal interest rate averaged 3.1% for an average period of 20.3 years and the index-linked interest rate averaged 2.15% for an average period of 20.1 years, meaning a drastic increase in interest and burden within two years.
The interest rate increases, the taking of mortgages decreases.
Construction in Ramla.
Anyone who expects that the Bank of Israel interest rate will drop soon is delusional/Reuven Castro
Don't expect an imminent interest rate cut
In February 2022, during the high tide period, the public took out mortgages to the extent of 11.23 billion shekels, in February this year 5.38 billion shekels, also less than in January of this year when they took out mortgages to the extent of 5.52 billion shekels.
Anyone who expects that the Bank of Israel's interest rate will drop very soon will be mistaken, in the coming months the monthly inflation will increase, or the Bank of Israel will wait until the middle of the year until it begins to reduce the interest rate, at the same time as the USA where the interest rate is expected to decrease in June at the earliest.
The governments have increased plans to help in the last decade to the population mainly since the plan of the former Minister of Finance Moshe Kahlon with "a price for the resident" and then similar programs for the housing subsidy that the Ministers of Finance adopted according to the target audience they represented. In 2023, 70.8% of families lived in an apartment or house they owned compared to 71.3% in 2022 and compared to 72.8% five years before and 75.2% a decade before. That is, in 2013, within a decade, 4.4% of the households in Israel of the entire population were outside the apartment owners, according to the CBS data.
Naturally, the proportion of families who lived in rentals increased in the last decade to 28.6% compared to 24.3% ten years earlier.
For comparison, in the European Union countries, the proportion of people living in rent is 30.9%.
The number of apartments in Israel reached 2.9 million in 2023, of which 829,000 are rented.
In Tel Aviv, the number of families living in rentals reaches 104,000, which make up 47.8% of the city's population.
In Givatayim, 41.2% of the families are renting, and also in the new city of Harish, 50.5%.
In Jerusalem they rent 75,000 apartments, in Haifa they rent 45,500, in Be'er Sheva they rent 27,000.
The Jews rent 29.6% of the apartments they own, the Arabs rent 12.2% of the apartments they own, the immigrants of the nineties who are not Jewish and others, rent 62% of the apartments they own.
The Jews own 69.8% of the apartments they live in.
Among the Arabs, for whom housing is a kind of savings plan, this rate jumps to 87.8%.
The governments neglected the weak in favor of the strong, the number of public housing apartments decreased in 2023 to 45,900 compared to 56,500 public housing apartments a decade earlier.
Thus, 10,600 apartments were taken from public housing to the detriment of the weak population.
In the protected public housing there was an increase in the last decade to 13,900 apartments compared to 10,600.
On the other hand, see an example for the benefit of the powerful: an unusual subsidy by the Israeli government for apartments for an established population in Israel, in the settlement of Ibn Yehuda, as stated these days by the Office of the Chief Economist in the Ministry of Finance in a document it published.
The salary level of the residents in the town of Even Yehuda, 31,400 shekels per month, is the highest among the salary levels in all the localities where the government has subsidized housing since the beginning of the first subsidy programs in 2016, housing for settlers, which you all remember.
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Price per tenant.
The high-tech buyers in Evan Yehuda received a crazy benefit of two million shekels/Shlomi Gabai
The strange case of Ibn Yehuda
In Evan Yehuda there is a relatively high incidence of households, in which at least one of the heads of the household works in the rewarding high-tech industry, precisely where the greatest benefit was given on behalf of the state.
Perhaps absurd, the community based in the settlement received a discount of 60% of the price of the apartment, paid NIS 10,200 per square meter for a 134 square meter apartment, the total price of the apartment for the resident is NIS 1.38 million.
According to the Ministry of Finance, the benefit for the resident of Eben Yehuda was NIS 1.5 million, even if it is assumed that the level of finish in the free market in the apartments sold in Eben Yehuda is not the same as the level of finish in state subsidized apartments, a benefit is received for the established stratum of NIS 1.6 million. If the quality of the apartment is worth the benefit to all A family climbs to 2 million shekels per family, Tabin and Takilin, according to the treasury economists.
There is also an explanation for the unusual situation: a long time passed between the winning and the date of signing the contracts due to disagreements regarding related infrastructures, "but this does not change the fact that a population A very well-established company enjoys an exceptional subsidy on apartment prices," notes the chief economist at the Ministry of Finance.
As mentioned, the public is sensitive to the price of the apartment, the contractors are sensitive to the stated price of the apartment in the sales contract. How do you overcome the gap in the last months since the war? In the last months, the contractors rushed to sell apartments with discounts and benefits, Note that this is not necessarily reflected in the listed price of the apartment, for a simple reason: the contractors cannot lose the value of all their assets in the eyes of the financing banks. If the sale value listed in the sales contract drops significantly, immediately the value of all the stock of apartments held by the contractor drops accordingly, a simple calculation of the banks.
Therefore, in the eyes of the contractors, the main goal is to sell.
One tenth of the apartments sold in January of this year were for delivery only 4 years after the signing of the sales contract.
The contractors made crazy financing deals, deferring the lion's share of the payment after receiving the occupancy form.
This is how the screaming, turnover was done, the contractors took additional loans from the banks and the scope of taking out mortgages by the buyers decreased.
The cash flow of the contractors was actually only half of the potential inherent in the apartment sale contract, says the Ministry of Finance, which helped the contractors reduce the prices of the apartments they actually sold.
In our estimation, the hidden benefits can also reach 4%-7% of the apartment's value.
The Treasury says that the fact that the lands of the sold apartments were purchased by them in the years 2022-2021, even before the wave of price increases, allows sales on "old" lands.
This evidence can support a drop in prices, especially in a difficult period when demand is declining, says the chief economist.
From here he asked you to get an impression of the "increase in apartment prices" old and new at a rate of 1.2% in the last month of January/December compared to November/December 2023. This is eye catching.
The supervisor of the banks at the Bank of Israel should examine whether the banks know or ignore the sales "at what seems to be" a high price, while the actual price is much lower, which obliges the banks to demand a higher equity capital from the contractors in any case.
Also according to the CBS, which has no choice but to report the price "in the sales contract", the prices of old and new apartments decreased in the last year by an average of 0.6% compared to the record annual increase that reached 20% for the months of September/October 2022. In new apartments, the price decreased in the year the latter by 2.2%. We will remember that 22% of the new apartments sold last year were government subsidized.
MMD. If there is no MMD in the apartment, it is difficult to sell and also difficult to rent/PR
Is there or is there no MMD?
As we have seen, the price of the apartment is a very important factor in the decision of those interested in purchasing an apartment, whether it is a "first apartment", an "investment apartment" or upgrading the size of the apartment or whether the size of the apartment is low.
Now after the Shiva massacre in October 2023, a very critical factor enters into the important decision of purchasing an apartment, whether or not there is a safety deposit box in the property subject to sale, it is a residential protected space
. A family for an extended stay during missiles and property damage.
The massacre further increased the awareness of the vital need for housing. Because of this, the demand for second-hand apartments lacking housing is decreasing, not only for tenants but also for investors.
Those who rent apartments from the investors set a condition of existence, from the square footage of the property they are seeking to rent. While in January of this year, the sale of new apartments from contractors, without government subsidy, increased by 36% compared to January of last year, and the number of apartments, including government subsidy, purchased from contractors, increased by 46% between periods, the number of second-hand apartments in Israel decreased by 5%. Housing developers naturally need to find a buyer for the old apartment, which is often dilapidated, and there are not even currently contractors to renovate it. "Missiles at you Israel".
The result for housing developers in January compared to January last year was a 13% decrease in apartment purchases.
Even the investors, some of whom were stuck with old apartments with no MMAD, are finding it difficult to get a return on the irrelevant property these days, it is difficult to rent out the aging apartments without MMAD.
Few buyers meant that the number of apartments that investors sold in January was about 12% lower than in January last year.
There is no enthusiasm to purchase an apartment without a mortgage, the number of apartments purchased for investment in January of this year decreased by approximately 6% compared to January of last year.
The segmentation of apartments for investment made by the chief economist at the Treasury shows that about half of the investors purchased new apartments, significantly higher by 10% compared to the purchase of apartments by Investing in the first nine months of 2023 before the massacre committed by Hamas.
In Jerusalem, 60% of investors' purchases in January were new apartments.
In Be'er Sheva, which before the war was characterized by the purchase of old apartments for investment, in January of this year fifty percent of the apartments purchased for investment were already new, a clear preference because the tenants of the investors ask for a protected apartment.
In conclusion: pay attention to the facts and not to trending headlines in the media.
The contractors stuck with nearly 68,000 apartments for sale, an increase of 32% within a year, will have to reduce the price - either in the contract or in benefits.
Time works in favor of the buyers who are sensitive to the price and the quality of the apartment, which can be a little more within their reach than in the last turbulent years, before the disaster of the war in Gaza.
More on the same topic:
apartments
contractors
interest
dimension
Discounts
benefits