Excessively expensive, yet first-time home buyers have doubled over the past year

Does the crisis become an opportunity? The ongoing conflict has plunged the entire Israeli economy into significant upheaval, with an unbearable rise in prices and tax burdens affecting all households. However, it seems that this great crisis also brings opportunities in the housing market. In the surge recorded last April in the purchase of new and second-hand apartments, updated data shows that first-time home buyers are managing to join the fray.

According to a report published on June 10 by the Chief Economist at the Ministry of Finance, last April saw a sharp increase in first-time home purchases, totaling 4,254 apartments, including government subsidies. This figure represents a 97% increase compared to the corresponding period last year, April 2023, which recorded one of the lowest levels historically in this sector. 

Excluding government-subsidized purchases (such as discounted apartment plans and target price plans), the number of free-market transactions in April reached 3,691 apartments—a remarkable 115% increase compared to April last year. Despite this impressive rise, there was a slight 3% decrease compared to March, mainly due to the fewer working days during Passover.

Government subsidies play a crucial role in first-home purchases. The report indicates that in April, the number of purchases with government subsidies alone was 563 apartments, a 28% increase compared to April last year. However, there was a 30% decrease compared to March, again due to the effect of Passover and the reduced number of working days.

Opportunities for Young People: Beersheba and Rehovot Lead in Purchases

Geographical segmentation reveals that the Beersheba area led the free-market first apartment purchases with 650 apartments, marking a 126% increase compared to April last year. It is the only region that registered an increase even compared to March, with a 3% rise. These data indicate a trend of young people from central Israel taking advantage of opportunities and making "on paper" purchases under favorable financing conditions offered by contractors. 

The Rehovot area also saw a high level of first apartment purchases, with 614 apartments, a 167% increase compared to April last year. 

This trend shows that many young people are ready to commit to purchasing an apartment, leveraging the favorable financing terms offered by contractors. In doing so, they are bolstering the market and setting it on a path of renewed growth despite the numerous economic challenges.