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Lowering the tax on a second apartment has doubled real estate investments | Israel Today

2021-02-11T22:16:15.412Z


| Real Estate Finance figures show that the rate of investors buying apartments in December jumped to 18.6% • "This is a doubling of the rate of investors within six months," says real estate appraiser Nechama Bogin • "The past year has made people realize that investing in real estate pays off in the long run." The new investors: young people and retirees Photography:  Dudu Greenspan Incentives work: In


Finance figures show that the rate of investors buying apartments in December jumped to 18.6% • "This is a doubling of the rate of investors within six months," says real estate appraiser Nechama Bogin • "The past year has made people realize that investing in real estate pays off in the long run."

  • The new investors: young people and retirees

    Photography: 

    Dudu Greenspan


Incentives work:

Investors are returning to the real estate market, and their age is getting younger. In the last six months, the rate of investor acquisitions has jumped by more than 100%.

According to an analysis conducted by real estate appraiser and lawyer Nehama Bogin, based on a survey by the chief economist at the Ministry of Finance, in July-December 2020, the volume of investors rose from 9% to about 19%.

During this period, 62,000 apartments were sold in Israel, of which 9,680 apartments were purchased by investors.

Last December alone, investors accounted for 18.6% of all residential real estate transactions, with the purchase of 2,500 apartments.

Bogin explains the reason for the influx of real estate investments: "The trend that accelerated the increase in the number of residential real estate investors is mainly due to the government's decision to reduce the purchase tax on a second apartment from 8% to 5%, which greatly affects the viability of buying."

The decision was approved at the end of last July, and was received with skepticism by various sources, such as an article in "Globes" from last August by Oz Koren, in which it was claimed: "3% reduction in purchase tax? This is not what will return investors to the market in Israel."

Reality shows otherwise: "The trend of seeing investors return is welcome and dozens of times better than smuggling investors abroad, which was before the purchase tax reduction," Bogin explains. "According to the economist's analysis, the nature of the investor has changed.

"This is no longer the classic investor, but the entry of new investors, among other things as part of the corona's influences on the conduct of the real estate market - younger, along with more retirees or parents who bought an apartment for a few more years for their children."

Alternative income

“Estimates are that the period and the past year have exposed quite a few people to what a global and economic crisis can do, and this has made them realize that investing in real estate is a worthwhile and long-term investment, especially in times of crisis or financial instability.

I hope that as many young investors as possible will join who will initially buy an investment property, whether it is a residential apartment or a commercial property and not necessarily an actual residential apartment.

That way, they can leverage themselves in the years to come. "

Yehuda Crescenti, from Moshav Beit Maimon, a 42-year-old elementary school teacher, married with children - purchased a 3-room apartment for investment in Netivot from Gilad Mai: "The business has not been active for a long time due to closures, and I preferred to invest in the property. Maybe even sell them the apartment at some point and profit from it. "

Gilad Yifrach, CEO of Gilad Mai, notes according to the data: "There is no doubt that in recent months in particular we have seen a rise in demand from investors and housing developers, who understand that residential apartments are the safest investment channel, and with medium and long-term profit potential.

Quite a few buyers on the fence, who have been waiting for the political tangle to end and for sure, see that while waiting prices are rising and construction starts are few, and they understand that this is the right time to take the step and buy an apartment.

"The fact that the government has stopped treating real estate investors as enemies, both in statements and especially in deeds, has contributed to their return to the market, and this is well seen in both sales offices and published data. People would rather get on the train now than regret it later."


Source: israelhayom

All news articles on 2021-02-11

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