For the rich only: how much equity will you need to purchase an apartment in your city? (Photo: ShutterStock)
The average ability to purchase an apartment in Israel has shrunk significantly in 2022, with fewer and fewer young people succeeding in penetrating it - this, according to an index published today (Thursday) by the Elrov Institute for Real Estate Research at the Kohler Faculty of Management at Tel Aviv University.
The affordability index in Israel examines the ability of households to purchase a 4-room apartment in various cities in Israel, based on a statistical analysis of real estate transaction data. The index is divided into two sub-indices: the equity index, which examines the equity
capital required to purchase an apartment. The monthly mortgage repayment index, which examines the amount of the monthly repayment for the mortgage loan that is required in the various cities.
Do the math: how many additional months of work will you need to purchase an apartment in your city?
As mentioned, the index looked at the average equity required to purchase a typical 4-room apartment in Israel, with the monthly repayment of the mortgage amounting to 30% of the household's net monthly income.
According to the test conducted, the average national equity in the fourth quarter of 2022 jumped by approximately NIS 169,000, reaching NIS 1.41 million - a figure that reflects a quarterly increase of 13.6%.
In an annual summary, the average equity capital required from a household in 2022 increased by 76% on average, representing an increase of approximately NIS 610,000.
The equity index broken down by cities and periods (photo: screenshot, Alrov Institute for Real Estate Research)
Households in the sixth, seventh and eighth deciles will be required to bring home equity of about half a million shekels in 10 of the 12 cities examined in the index.
In Beer Sheva, people in the sixth decile are required to have equity capital of approximately NIS 124,000, in Haifa 333,000 NIS, in Hadera 943,000 NIS, in Ashdod 962,000 NIS, in Petah Tikva 1.19 million NIS, in Bat Yam 1.18 million NIS, in Rehovot 1.25 million NIS, in Rishon Lezion 1.38 NIS 1 million, in Bnei Brak NIS 1.48 million, in Jerusalem NIS 1.59 million, in Ramat Gan NIS 1.73 million, and in Tel Aviv NIS 3.08 million.
Compared to the previous quarter, increases were recorded in the fourth quarter in all cities: in Hadera 30.5% (NIS 200 thousand);
Ashdod 16.8% (NIS 126.5 thousand);
Petah Tikva 14% (NIS 136 thousand);
Bat Yam 6.9% (NIS 71 thousand);
Rehovot 13.2% (NIS 136 thousand);
Rishon Lezion 21% (NIS 225 thousand);
Bnei Brak 12% (NIS 151 thousand);
Jerusalem 15% (NIS 197 thousand);
Ramat Gan 10.8% (NIS 161 thousand);
Tel Aviv 6.5% (NIS 183 thousand).
In an annual summary, the required equity increased in all the cities tested: 58% in Ramat Gan, 37% in Tel Aviv, 64% in Jerusalem, 74% in Rishon Lezion, 115% in Rehovot, 109% in Bat Yam, 158% in Ashdod, 160% in Petah Tikva, 139% in Bnei Barak and 280% in Hadera.
The monthly repayment jumps accordingly: the 10,000 shekel barrier has been crossed in the monthly repayment of her mortgage
The average monthly repayment required for a 25-year mortgage loan for the purchase of a typical 4-room apartment in Israel with a financing rate of 70% crossed the NIS 10,000 barrier in the fourth quarter of 2022 and stands at NIS 10,352 - an increase of approximately 14.2% compared to the previous quarter.
In an annual summary, the average monthly repayment in 2022 increased by approximately NIS 3,500 - an increase of 51% compared to its level in the corresponding quarter last year.
At the same time, the index notes, the average income of households registered an increase of about 2.2% during the fourth quarter of 2022.
The monthly repayment index of the mortgage broken down by cities and periods (photo: screenshot, Alrov Institute for Real Estate Research)
In all the cities examined, there was an increase in the monthly repayment during the fourth quarter of 2022 compared to the quarter that preceded it.
Thus, the monthly repayment in the fourth quarter of 2022 compared to the previous quarter in Rishon Lezion increased by 16.9% (NIS 9,890);
in Hadera 16.7% (NIS 8,165);
in Haifa 16.8% (NIS 5,760);
in Jerusalem 15.3% (NIS 10,720);
in Be'er Sheva 15.3% (NIS 4,930);
in Tel Aviv and Ramat Gan 13.6% (16,000 and 11,280 shekels respectively);
in Bnei Brak 13.3% (NIS 10,280);
in Petah Tikva and Rehovot 12.8% (NIS 9,890 and NIS 9,150 respectively);
In Ashdod 12.4% (NIS 8,240) and in Bat Yam 9.7% (NIS 9,110).
Also at the annual level, the increases in the monthly repayment were recorded in all the cities examined.
in Bnei Brak at a rate of 65.7%, in Petah Tikva 59.5%, in Hadera 59%, in Rehovot 54.2%, in Tel Aviv and Bat Yam 51.0%, in Ashdod 50.4%, in Jerusalem 48.79%, in Ramat Gan 48.3%, in Rishon Lezion 47.9%, in Beer Sheva 46.7% and in Haifa 43.2%
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