May 16, 2022

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Israel Decides to Market Housing Units at Affordable Rates

2 min read

Just recently, the Israel Land Authority (ILA) and the Ministry of Construction and Housing announced that they will be listing around 30,000 housing units to be sold off at affordable rates in this year. They said that they will be starting off with 10,000 units initially, which will be placed in the market before the country settles down for the Passover holiday in the month of April. As of now, this initiative is going to extend to over 80 towns and cities throughout the State of Israel. It will include 1,100 units in Ashdod, 1,300 units in Haifa, 900 units in Beersheba, and 1,100 units in Yavneh. 

The relevant authorities announced that these apartments will be put on the market to be bought primarily by young families, people buying homes for the first time, low-income individuals, and single-parent households. However, low-income individuals will first have to be vetted for this affordable housing, before they can be declared eligible under any one of the programs designed by the Housing Ministry. One of these programs, Buyers’ Price, also known as Mehir Lamishtaken, was launched in the year 2015, which is currently being phased out. On the other hand, the government released Target Price, or Mehir Matara, last year, which was announced by Ze’ev Elkin, the recently appointed housing minister. 

The Buyer’s Price program was started by Moshe Kahlon, the former minister for finance. It was meant to be a lottery system, which entailed that apartments built in areas outside of central Israel would be sold off at discounted rates to all those applicants who met certain criteria. The aim of the project was to lower the housing prices in the country and allow people to own homes easily. However, the program received heavy criticism for not being able to provide the size, location, and quality of apartments that would suit the intended buyers. On the other hand, Target Price is operating as a lottery system and is offering a 20% discount, which can go as high as NIS 300,000, on the purchase price of the apartment. 

It is also giving out grants of NIS 40,000 in some specific areas. The most recently announced housing program is going to be targeting the so-called periphery in the State of Israel. These areas are known for having low socioeconomic rankings, as per the data released by the Central Bureau of Statistics. In various cases, some of these towns are located far from the center of the country and do not have many employment opportunities or developed transportation systems. 

Where the Buyer’s Price program was concerned, people were given grants that ranged from NIS 40,000 to NIS 60,000. They were approved for buyers deemed eligible, residing in particular locations. Most of the time, these grants were awarded to citizens who had homes in remote areas or where there was a low level of demand. However, the program was limited in projects where the value of the land, on which the apartment was located, fell below NIS 100,000. 

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