The average discount for home buyers in Beit She'an was NIS 676,390 – NIS 290,26-3,<> lower than the discount in Rishon LeZion. The average household wage of buyers in Rishon LeZion was NIS <>,<> (gross per month) – double that of Beit She'an.
The couple Omer and Shani won a price for a buyer in Afula. Both are 29 years old, live in Ramat Gan and have never visited the capital of the valley. She runs her mother's private kindergarten while he works in the stock exchange. The idea was to rent the house in Afula and continue renting in Ramat Gan.
However, three things the two did not take into account – the increase in mortgage interest rates, the increase in rent by another NIS 1,500, and the resulting difficulty in finding a tenant in Afula. Now they are in a huge financial problem.
For years, the state, with a promiscuous approach, encouraged an entire generation of young couples to become investors. Tell them - buy an apartment with a benefit and government subsidy in the periphery far from home, rent out, and rent yourself an apartment where you live in the center. Now the result becomes clear.
The Association of Winners – a project that makes information and unique tips accessible to the winners of "Buyer's Price", "Target Price" and "Apartment at a Discount" – conducted a comprehensive survey among 500 lottery winners between 2023-2018. Among other things, it was discovered that 22% of the winners of these apartments designate them for investment purposes – the opposite of the purpose of the lotteries.
A quarter of the people who won the lottery have not yet been invited by the contractor to choose an apartment, while six per cent for whose apartments the contractor received a permit have not been summoned and 37 per cent have received a key. The encouraging statistic - a third of the winners are very satisfied and feel that they made a good deal. 8% are very dissatisfied and a little more than a quarter are satisfied to some extent.
Deprived of discounts
"The results of the survey show that the increase in rental prices in Israel causes the winners to see apartments as an investment option and not necessarily for residential purposes – the state's initial designation for these projects," says Ran Goren, CEO of the Association of Winners, "However, there is great satisfaction among the winners, who also reported that following the win, they improved the possibility of purchasing an apartment in Israel."
The Association of Winners was established in order to make information accessible and offer real value in all areas surrounding the purchase of an apartment to lottery winners and to bridge the gap between all the various entities involved in the apartment purchase process. The union's community currently numbers about 25,<> winners who consult, share and pass on information to each other, along with the support of the association's experts who accompany them.
As we already revealed in the Real Estate Today investigation of lottery roulette, when huge discounts exceed NIS 1 million and "qualifying" buyers arrive at sales offices in luxury cars, it remains to be asked: Who do the benefits for a subsidized apartment really serve?
Increased benefit for established persons
In total, the Buyer's Price Plan for Israeli citizens cost NIS 10 billion, which benefited about 200,<> households with difficulty. A young couple who won the price for a tenant in the Galilee paid about two million shekels for a four-room apartment, which is currently worth over four million shekels on the open market. This deprived buyers of the periphery, in Dimona and Kiryat Shmona, for example, who received much smaller benefits of only NIS <>,<>.
Even when examining the number of tenders given for low-cost housing, we learn of significant gaps that indicate that the large discounts given by the state are in areas of a well-established population. For example, the price for 100-square-meter apartments in Be'er Sheva will be NIS 895,1 for lottery winners, compared with NIS 2.300 million in the open market (a gap of about NIS 900,1). In Ashkelon, lottery winners will pay NIS 35,450 for a similar apartment, compared with NIS 1.19 million – a difference of about NIS 1,6; in Lod – 407.1 million compared to 36.1 million, a gap of about NIS 65,300; In Ashdod, the winners will pay NIS <>.<> million, compared with NIS <>.<> million on the open market – a gap of about NIS <>,<>.
In contrast, the price per occupant in Rishon LeZion, according to an examination by the Chief Economist at the Ministry of Finance, offered subsidized apartments for an average of NIS 1.7 million. Compared to the prices of new apartments of similar size purchased by young couples in the city, the government-subsidized discount is estimated at close to NIS <> million.
An analysis of prices on the open market for new apartments purchased in Beit She'an found that the average discount for buyers was NIS 676,390 – NIS 290,26-3,<> lower than the discount in Rishon LeZion. At the same time, it was found that the average household wage of buyers in Rishon LeZion was NIS <>,<> (gross per month) – double the average wage level of buyers in Beit She'an.
In the "Buyer's Price" auction in Kiryat Ono, for example, the discounts made the deal extremely worthwhile. Those who benefited from it had an average income of NIS 24,40. An analysis of the tender shows that the amount of the discount granted reached about <> per cent – a subsidy of about NIS <>.<> million. Do young people have such sums? The answer is: Of course not.
Reverse logic
And what about the real investors? While the number of young investors under state auspices is increasing, the number of high-net-worth investors is decreasing. According to the Chief Economist at the Ministry of Finance, investor purchases totaled 943 homes in May, a decline of 51 percent compared with May of last year. This rate of decline is less sharp than that recorded in April (when these purchases declined by 60 per cent compared to April last year), but sharper than that recorded in the first quarter of this year.
Compared to the corresponding months over the past 2020 years, it was found that only in May 15, which was overshadowed by the coronavirus, was there a lower level of investor purchases. The share of investor purchases out of total transactions was <> percent, three percentage points lower than in May of last year. Is it logical to smuggle the wealthy out of investments under state auspices because they are "enemies of the people" and that the policy in recent years has been to raise taxes on them so that it will not be worthwhile for them to buy an apartment for investment in Israel? On the other hand, is it reasonable to encourage young couples, who often do not have the means and money, to become homeowners investors? On this it is said - "only in Israel".
Jerusalem: The municipality will preserve buildings in the Bayit Vagan neighborhood
21 historical sites in Jerusalem's Bayit Vagan neighborhood – one of the few that remained and preserved the local character – will be preserved with the approval of the municipality. Among the buildings are the water tower and the Ben Shimon family building, which was built by Masoud Ben Shimon, one of the founders of the neighborhood.
Bayit Vagan was founded in 1926 – the fifth of six Garden City neighborhoods designed by architect RicharD. Kaufman in Jerusalem during the British Mandate. The original plan was to allocate plots of three dunams and allow construction of only up to 40% of the plot area, in order to realize the name of the neighborhood "Home and Garden" - houses of one to two floors, with red tiled roofs, courtyards with cypress trees, Pines, eucalyptus and flowers. In addition, 35% of the neighborhood's area was allocated for public use.
Bayit Vagan Street Photo: Courtesy of the Jerusalem Municipality,
Its first inhabitants were Jews from the Sephardic community, who built the large Sephardic synagogue located at the intersection of Bayit Vagan and Uziel streets.
A number of important factories were established in the neighborhood, such as Angel Bakery, which allowed neighborhood residents to use the hot ovens for Shabbat after work was finished and free of charge, the Teva pharmaceutical factory, the Nofet candy factory, a printing house, a biscuit factory and more.
The Jerusalem Municipality said: "It is of great importance to add the sites to the conservation list precisely now, when Jerusalem is undergoing a tremendous development momentum."
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