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UBS: How many years do I need to rent an apartment in Tel Aviv in order to return the investment? | Israel Hayom

2023-09-20T14:46:40.934Z

Highlights: According to the Swiss Bank's annual International Real Estate Bubble Index: Tel Aviv ranks fourth among the large cities examined in the number of years a skilled person has to work to finance the purchase of a 60-square-meter apartment. At the same time, Tel Aviv is no longer in danger of a "real estate bubble," according to the same index. For the study, UBS analyzed residential real estate prices in 25 major cities around the world. From mid-2022 toMid-2023, city house prices fell by an average of 5%.


According to the Swiss Bank's annual International Real Estate Bubble Index: Tel Aviv ranks fourth among the large cities examined in the number of years a skilled person has to work to finance the purchase of a 60-square-meter apartment - 14 years


A city for the rich only? Tel Aviv ranks fourth among the large cities examined in the number of years a skilled person has to work in order to finance the purchase of a 60-square-meter apartment - 14 years. That's according to Swiss bank UBS's annual international real estate bubble index.

The White City is above London, where a person with an average salary has to work for 12 years to purchase an apartment; Above Dubai (8 years), with the cities of Madrid, San Francisco and Miami at the bottom of the table with an average of 6 years.

Non-stop cost, photo: Moshe Shai

An equally interesting statistic is how many years of renting the same apartment are required to repay the price of the apartment. Here Tel Aviv comes first – with more than 45 years. This is in contrast to San Francisco and São Paulo with 20 years, or Miami and Dubai with 16 and 17 years respectively.

At the same time, Tel Aviv is no longer in danger of a "real estate bubble," according to the same index.

Although Tel Aviv showed the highest growth of any of the 25 cities surveyed each year with a tripling of home prices between 2002 and 2022, the city saw a decline in prices this year due to interest rate increases by the Bank of Israel and keeping interest rates high alongside inflation.

The number of years an apartment of the same size needs to be rented out to pay for the apartment,

Last year, Tel Aviv, along with a limited number of other cities, was in territory of risk of a bubble in its real estate prices.

This year, it is moving – along with eight other cities that were in the bubble category – into an overpriced zone, but is not at real risk of a bubble.

This change is part of a global trend of inflation and high mortgage interest rates around the world that is cooling the demand and ability to purchase residential real estate.

The report also predicts that real estate prices in Tel Aviv will continue to cool due to the expectation that interest rates will remain high.

Home prices have fallen

For the study, UBS analyzed residential real estate prices in 25 major cities around the world. From mid-2022 to mid-2023, city house prices fell by an average of 5 per cent. It is likely that further price declines are expected in the future, according to the review.

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Source: israelhayom

All news articles on 2023-09-20

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