Are the young people flocking to the housing market?
They will still think it is easy to buy an apartment here/ShutterStock
It's been almost two years that everyone is confused.
The uncertainty in the Israeli economy began with the first increase in interest rates in April 2022, and continued to the legal revolution in early 2023, and the war of iron swords in Black October.
During this long period the housing market went on hiatus.
The young couples were indeed sitting on the fence, but it is a mistake to think that this means that demand is falling and so are prices.
In the end, the buyers on the fence also need a place to live, and the questions keep coming: buy an apartment now or wait?
What is better, a new apartment or a second-hand one?
Will prices go down or up?
The latest report of the chief economist at the Treasury, published this week, proved this.
The surprising report, which referred to the month of January 2024, presented an amazing recovery: a dramatic increase in real estate transactions precisely now, in the busiest period, with a significant jump in the purchase of apartments by young couples. The
report shows that the purchases of young couples in January amounted to 4,705 apartments, a sharp increase of 40% compared to January of last year, as well as compared to the previous December. The contractors also present optimistic data: in January their sales totaled 3,716 apartments, including government-subsidized apartments. A sharp increase of 46% compared to January of last year, and the highest level of contractor sales since May 2022.
The young couples are confused/ShutterStock
However, make no mistake - homebuyers are in bad shape.
very bad.
Another report that was also published this week, this time by the Central Bureau of Statistics (CBS) presents data on apartments in Israel segmented by ownership and rent between the years 2013-2023. According to the report, if we compare a decade back, the number of owners of apartments owned by the age of 34 has decreased. And accordingly, the number of young people of these ages who live in rentals has increased.
In other words: it is more difficult for young people to buy an apartment today. 52% of the apartments of young people aged up to 34 a decade ago in 2013 were rented apartments (compared to 58.4% in 2023).
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Harish can only dream of becoming an intelligence officer
Another amazing statistic that emerges from the CBS report shows that Israel's recovery is being celebrated: a new city was built in the last decade called "Harish", based on the successful model of Modi'in.
However, while Modi'in is "flying" in demand and has become a dizzying success story for young families who dream of living there, in Harish, It turns out this week, half of the apartments are for investment, that is, those with means buy to rent to those without means.
The default: the State of Israel builds a new city but - does not take care of the train, puts it on Route 6 without a direct interchange and does not take care of a huge employment center. This is not how you build a city.
Harish: Israel's new rental city/Official website, Israel Bardogo
According to the report, Harish is in the first place in Israel in terms of the rate of apartments for rent in its area, and has even overtaken Tel Aviv, Israel's rental city, when 50.5% of the apartments in its area are rented;
Tel Aviv-Yafo, which as mentioned has topped this index for many decades, is now in second place with 47.8% rented apartments, and Givataim is third with 41.2%.
We would like to emphasize that in terms of the nominal number of apartments for rent, Tel Aviv is still in first place, with more than 100,000 rented apartments.
This is the time to look for opportunities
I've been saying for months now that it's time to look for opportunities, especially when the contractors give financing for the purchase of an apartment, i.e. pay 20% today and 80% upon occupancy.
You should also leave the borders of Gush Dan.
It is not uncommon to find entrepreneurs today who offer buyers to pay even 5% at the time of purchase, when they in turn also absorb the financing costs until the project is completed.
This is of course better than second-hand apartments.
The aforementioned report of the Chief Economist at the Treasury shows that the significant sales promotions of the contractors, which began in recent months and continued in January while focusing on favorable financing conditions for buyers, contributed to the considerable recovery in the new apartment market. In addition, it can be assumed that the buyers' preference for apartments with MMD contributed It is also on the one hand for an increase in the purchase of new apartments and on the other hand for the continued shuffling in the sale of second hand apartments.
In addition, we saw that the condition of the contractors is also improving.
In other words, economic stability was not damaged.
In the analysis of the potential cash flow of the contractors (we emphasize that by this term we mean the financial consideration for the sale of the apartments, regardless of the date on which this consideration is received and before offsetting the permitted inputs as a deduction) it was found that in January it stood at NIS 8.9 billion, a real increase of 32% compared to January last year.
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