Are Israelis giving up on the dream of an apartment?

New economic research conducted by the consulting and research firm Geocartography for Walla!

Real estate among tenants across the country, some apartment owners and some non-residents, checked their desire to live in long-term rent and in the desired areas. The results are surprising

Walla!

Real Estate

18/01/2022

Tuesday, 18 January 2022, 13:20 Updated: 13:40

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The findings show this clearly: about 60% of tenants own an apartment that is in a city where they do not live today.

About 35% own an apartment in the same city, about 5% once lived in the city where they have an apartment

Will the Israelis give up the dream of owning the apartment? A new economic study conducted by the consulting and research firm Geocartography, led by Dr. Rina Degani, among 500 tenants across the country, some apartment owners and some non-residents, examined their desire to live in long-term rent and in sought-after areas

. Long-term, it helps populations that are unable to purchase apartments, especially in areas of demand, and also allows the household the freedom to choose

their

place of residence.

Renting You can learn about the need to change your place of residence: close to 30% of households now live in rent, but the findings show that about 17% of tenants own an apartment.

The findings show this clearly: about 60% of tenants own an apartment that is in a city where they do not live today.

About 35% own an apartment in the same city, about 5% once lived in the city where they have an apartment.

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Long-term rental in Galil Yam (Photo: Rami Hacham)

Only 9% of tenants own an apartment in Tel Aviv

The rate of apartment ownership among tenants increases as expected with age: only 12% of young people own an apartment, compared to about 25% of older families

The study also shows that about half (45%) of the tenants who own the apartments have an apartment in the periphery (north and south) and only 9% of the tenants own an apartment in the Tel Aviv area. The main reasons that tenants do not live in the apartment they own is the location of the apartment and its area: the apartment is far from the workplace and relatives and do not like the area, apartment and neighborhood. For some tenants, the rented apartment is an upgrade over the owner-occupied apartment which is too small for their needs and is relatively old compared to a rented apartment. About 27% do so for economic reasons. About 17% live in rent because the apartment they bought is not ready yet - that is, they are only temporary tenants.

Rented housing is definitely an option when about 40% are willing to rent and buy an apartment in their budget in another locality, about 50% still aspire to live in an apartment they own in a location that the budget allows, 8% do not see economic viability in buying an apartment. Those interested in long-term rent (57%) would like to live in a new project for rent in the locality where they live or are considering moving to it, and their rate is higher in the Central and Sharon area. About 55% of tenants will be satisfied with up to 5 years of tenancy, about 25% want 6-10 years and about 20% are interested in long-term tenancy, over 10 years.

More than half of the young people (53%) up to the age of 35 live in rented accommodation, but the average rental year increases with age: young people live about 5.3 years in rent, families - aged 35-54 about 10 years and older, who failed to buy an apartment for about 13 years . The rate of apartment ownership among tenants increases as expected with age: only 12% of young people own an apartment compared to about 25% of older families.

Young people with apartments bought apartments in all parts of the country: more than half (55%) bought in the periphery (north and south), 20% in the central area, 15% in the Jerusalem area, and only 10% in the Tel Aviv area.

Over two-thirds (70%) of young people have not purchased in their city of residence.

These are young people who live in the center of the country and purchased an apartment as part of a price per occupant or out of a desire to own an apartment for rent.

About two-thirds (65%) of the families living in rented accommodation have an apartment in the periphery (north and south), 10% in the Jerusalem area and only 2% in the Tel Aviv area.

Signing a lease (Photo: ShutterStock)

"Rental housing market will lead to higher domestic migration"

Orbach: "Among long-term tenants, there are young people who own an apartment, especially in the periphery, or those who are in the process of buying an apartment but are interested in living in a better location."

Dr. Rina Degani, editor of the study, says that “in light of the findings I anticipate that the rental housing market will lead to higher internal migration between localities and neighborhoods. Although about 30% of households today live in rented accommodation, 17% of them own an apartment elsewhere. A rental market from an institution in the future will allow households to move between neighborhoods and localities according to the changing needs of the household, and this may be the revolution that has not yet reached Israel, which will also affect the labor market - households will find a good place to live Residential problems.

"Institutionalizing the rental market will provide a solution to the housing crisis, the difficulty of purchasing an apartment and the desire to improve the quality of housing. Even today, in a reality where apartment prices are unbearable, about 17% of tenants bought an apartment, mainly in the periphery. Built in the Tel Aviv and Central Districts.

Jasmine Orbach, marketing and sales manager and rental housing department at the Ambassador Group, which has marketed about 1,000 units in recent years in four projects in areas of demand, including Jerusalem - Arnona neighborhood and Herzliya - Galil Yam, says that "the findings from the study match the trend we have witnessed in years The last, and especially the last year and a half, since the Corona began. It can certainly be said that the interested and renting audience is very heterogeneous, and varies from region to region.

"Among long-term tenants, there are young people who own an apartment, especially in the periphery, or those who are in the process of buying an apartment but want to live in a better location, in a new project run by a management company at the expense of Offsets with the apartment they own that they rent, just as the study shows. We witnessed this audience in the Africa Israel project in the Galil Yam neighborhood, which is very popular with young people.

"The second audience of young people consists mainly of eligible people (as part of the government program" apartment for rent ") who now do not see the horizon and possibility of owning an apartment in the coming years, some fear economic uncertainty, and are therefore interested in permanent housing and a term that will allow them to save An order of magnitude of up to five years in rent and at a reduced rent of about 20%.

"Even for a relatively older and established population that owns a rifle apartment, the long-term rental solution was very attractive. We met this audience in a housing and construction project we marketed in the Arnona neighborhood and it included homogeneous groups of retirees who want to live in a complex that provides all the envelope and services. Who are interested in a residence closer to the workplace and of course have an apartment owned."Many of the tenants invest considerable sums of tens and hundreds of thousands of shekels in equipping the apartment, and this indicates the intention and desire to live in this style, similar to the findings of the study."

For those interested in long-term rent, Auerbach says that "it should be noted that the rental process is very similar to buying an apartment and should not be taken lightly. This is a commitment to large sums of hundreds of thousands of shekels over 5 to 10 years. And receive guarantees and collateral before signing the contract. "

"Institutionalizing the rental market will provide a solution to the housing crisis."

Dr. Rina Degani (Photo: Ofra Vaknin)

Case Horizons as an example

"Great solution."

Zvi Weiner (Photo: Roi Cohen)

Long-term rental housing has also reached the periphery, with the Megiddo Group recently winning a tender to rent an apartment in Ofakim. The project will include 66 units for rent in the Horesh Noah neighborhood and 142 units in Afikim Nahal, of which 84 apartments for sale and the rest for rent, as well as 3750 square meters for commerce and employment. The apartments for rent will be marketed at a reduced price. The project will be at a regulated price and half of them will be rented on the free market.

According to the CEO of the Megiddo Group, Zvi Weiner: "Rental housing offers a great solution for young couples both in the center and in the periphery in light of the rising apartment prices every year. We see these projects, just like promoting residential construction, as an opportunity to develop and offer quality residential solutions to many audiences. Many residents who come from outside the cities in the south, such as Ofakim and want to first examine the environment and whether they will be able to integrate in it, can find in the rental project an ideal opportunity for the first years to establish themselves in the new environment. The same applies to young couples at the beginning of their journey who have not yet expanded the family unit or become financially established to start renting and later after being assimilated into the living environment, enrolling children in educational institutions and connecting to the community, they choose to purchase a permanent home. Ofakim in particular is a city in a momentum of innovation and construction that is moving forward in all areas.The city is about an hour's drive from the center of the country and is very close to the Be'er Sheva metropolitan area, and with the development of the new road from Ofakim's new neighborhoods toward the Negev capital, the travel distance will be shortened by at least ten minutes. "

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