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A decade of social protest

A decade of social protest: How many years will you have to work to buy an apartment?

The social protest began with the cost of living and the difficulty of getting to an apartment in Israel in the background, but the situation has only worsened since then.

We examined how many builders today compared to 2011, whether Israel is still considered a hit among foreign residents and how many salaries are needed to reach the coveted dream of a property you own.

Travel Warning: The data is difficult

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David Wertheim

Sunday, June 27, 2021, 12:30 p.m.

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In relation to population growth, much less construction starts.

Ramat Gan (Photo: Reuven Castro)

In 2011, according to the Ministry of Finance, about 128 salaries were required to purchase an average apartment in Israel, while in the past year, the corona year, 137 salaries were required to purchase an apartment.

A decade of social protest that began with the cost of living and the difficulty of getting to an apartment in Israel in the background, and the situation since then has only worsened. The CBS recently published the Consumer Price Index, including the level of housing prices over the past decade, which brings us to see that in the last four years prices have risen by an average of 5% per year, despite the then Finance Minister Moshe Kahlon's attempt to stop plans. For example, in the past year housing prices have risen by almost 6% or more.

To illustrate how much the situation has worsened since then, we examined how much the average Israeli citizen will have to work to reach the coveted dream of an apartment in Israel. Of an apartment for about NIS 1.1 million, then in 2021 it will reach NIS 1.51 million, an increase of about 36 percent.

So how many salaries are required to buy an apartment in Israel - the calculation is made according to two data provided by the Central Bureau of Statistics: average apartment prices for the period, and the average (gross) monthly salary.

In 2011, according to the Ministry of Finance, about 128 salaries were required to purchase an average apartment in Israel, while in the past year, the corona year, 137 salaries are required to purchase an apartment, a decrease compared to the previous three years.

In practice, the situation is probably much worse, as the main reason for the decline this year is high unemployment in the past year, which has led to many low-wage earners being laid off or fired, while high-wage earners remain employed. This has led to a sharp rise in average wages. The apartments that continued to rise created an artificial decrease in the number of salaries required.

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The upward trend continues.

Real estate prices in Israel (Photo: Walla !, illustration)

"Prices will continue to rise."

Sabag (Photo: Tomer Shalom, Thomas Studio)

Yinon Sabag, VP of the Ambassador Group, which specializes in consulting and marketing for real estate companies that have marketed thousands of housing units in the last decade across the country, is trying to explain to Walla!

Real estate What is behind the rise in prices.

He said, "The past decade has been marked by the development of the periphery and a change in the demand map in Israel, investment in infrastructure, mainly transportation, road systems, interchanges and mass transportation, which have become a catalyst and demographic generator in reducing the gaps between the geographical periphery and the center of the country." The situation has in fact brought the distance and time of arrival to and from the center closer. This situation has led young people to explore alternative housing far from the center at more reasonable prices. Hence the rise in apartment prices we see in places like Beersheba and Ashkelon Netanya, Hadera and Bat Yam have also enjoyed real estate boom and high demand levels in the past decade due to their proximity to strong demand areas such as Tel Aviv and Rishon Lezion (in the case of Bat Yam) and the center of the country (in the case of Netanya and Hadera) and the understanding that land reserves near Israel's shores Running out and properties in these areas will only increase in value.That is why in these cities prices have risen by more than 40% in the last decade. "

According to Sabag, "We expect prices to continue to rise in places that have apparently not yet made the real estate leap, such as many neighborhoods in Jerusalem where prices have risen very moderately, but in recent years have undergone urban renewal processes such as Kiryat Yuval and the Katamonim.

Also, in cities near the sea, such as Ashkelon and Hadera, which offer prices that are still accessible to the majority of the public. "

The population has grown, the amount of construction starts not really.

A decade of protest (Photo: Walla !, illustration)

Construction starts: Ashkelon in the top

When examining the data against the average population growth rate in Israel, the situation seems much worse.

According to the CBS in 2011 Israel had 7.76 inhabitants and at the beginning of 2021 we stand at about 9.29 million inhabitants

At the end of the first quarter of 2021, according to the CBS, 49,990 construction starts were recorded for apartments in Israel in the past year (April 2020 - March 2021), a decrease of 102% percent compared to the corresponding period in 2019-2020. The largest number of construction starts was recorded in Ashkelon, which has been starring in Top for several years, followed by Tel Aviv-Yafo, Ramat Gan, Rishon LeZion Jerusalem and Netanya. A decade ago, 46,763 construction starts were recorded per year, a slight increase from 2010. When examining the data against growth rate The average population in Israel, the situation seems much worse. According to the CBS in 2011 Israel had 7.76 inhabitants and at the beginning of 2021 we stand at about 9.29 million inhabitants.

Real estate appraiser and lawyer Nehama Bogin notes that the housing crisis for which people took to the streets a decade ago is still with us and in order to bring about a solution it is necessary to advance a number of moves.

"First, there is a need to promote long-term rental plans. Due to the fact that prices are rising, many couples are unable to obtain equity and pay for an owner-occupied apartment. A long-term rental housing plan will help stabilize prices, provide stability over a period of tenants. "They also have the price of rent or ask them to vacate. Also, in light of the work that land in areas of demand is a rare commodity, it is worthwhile and worthwhile for the government to promote projects for urban renewal. One of the problems today in projects like this is the time until the building permit is obtained."

"Promote long-term rental plans."

Bogin (Photo: PR)

According to Bogin, "There is a need to tighten control over the schedules of planning committees when it comes to responding or promoting and approving plans for new construction and infrastructure development. At the same time, it is also important to lead to economic viability that will give real developers more incentives to build." For construction eviction plans from 50% to 25%. Once the levy is reduced, the economic viability will increase and allow more projects to go ahead. In addition, legislation should be allowed that will reduce the consent of the required majority of apartment owners from 80% to 66%. "Excessive refusals or demands from various tenants. Many projects get stuck for years because of tenant refusal. These changes are very important and can give maximum impetus to the important process of evacuating construction in urban renewal."

"Few inquiries."

Foreign residents abandon (Photo: Walla !, illustration)

Skydiving in purchase by non-residents

One of the reasons for the sharp rise in apartment prices about a decade ago was the massive purchase of apartments by foreign residents, amounting to about 4,000 apartments each year. The phenomenon created frustration among young couples who saw the apartments purchased by those who do not live in apartments most days of the year. Since then, the level of demand from foreign residents has fallen, mainly due to the heavier tax on foreign buyers during the Kahlon period, and reforms made in the banking system that do not allow black capital to flow into Israel from abroad. During 2020, foreign residents purchased only about 1,200 apartments, less than a third of the annual figure a decade ago.

According to Roi Fadlon, co-CEO and owner of the Shponder-Fadlon Group, which is building the Brizzo luxury project near Bat Yam beach, in a location previously considered attractive to non-residents, "Referrals coming to us from abroad are few and do not mention demand about a decade ago. The apartments in the project are housing developers from the central area and investors. "

However, Fadlon adds a reservation: "2020 was an exceptional year in most countries. In most countries of the world, the Corona virus is still raging, and homebuyers living in France and the United States may prefer to wait for now. So I do not rule out the possibility that as the plague subsides, the number of non-residents will increase." .

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