At 68 years old, Israel has 8,522,000 inhabitants, 75% of whom are sabras (born in Israel)! A beautiful comeback from World War II. Especially when we know that according to a recent survey, 86% of Israelis are satisfied with their life in Israel, 70% of those under 44 think that their economic situation will improve, 67% of Israelis aged 15 to 64 have a job and 89% don't see their future anywhere other than Israel!
In Israel, people traditionally marry on average at 28 for men and 26 for women, while in France, the average marriage age is 33 for men (31 for women). Thus, 57% of singles under 28 live with their parents! 31% of 29-34 year-olds! Because very often our young singles cannot manage to save to buy before marriage, and it's generally thanks to their parents' contribution that they can risk taking a mortgage loan to settle down once married.
In fact, it is very difficult for young people, whether in a couple or not, to buy today because apartment prices keep rising. Since the new Moshe Kahlon law aimed at lowering real estate prices in Israel at the beginning of the year, we have seen a 6% increase! And although culturally in Israel, the priority after marriage is to acquire one's home, we note that if in 2005, 64% of couples between 25 and 30 were homeowners, today only 45% own an apartment.
As for renting, it's a real nightmare in Israel because the law is so favorable to landlords that tenants are regularly forced to move every two years on average. Statistics also show that rents have increased by 65% on average over the past eight years (56% in Jerusalem, 70% in Tel Aviv) while salaries are far from having experienced the same increase!
A real problem therefore, because young people cannot manage to leave the nest even while working, and prices are not about to fall either for rental or purchase. If in France or the USA, it's possible to embark on a rental investment because you can get a mortgage loan up to 100% of the value of the real estate you're buying - knowing that the expected rent will fully cover the monthly payments of the loan taken out - in Israel it's very different. Here you need to provide 30 to 50% of the price of the apartment purchased, add a tax that can go up to 8% of the property price as well as additional costs (agency, lawyer, possible renovations...). And given the incredibly high price of apartments even on the outskirts of major cities, young couples now tend to buy on the outskirts to rent out, and live themselves as tenants elsewhere. Indeed, here, the rent you can hope to receive for an apartment corresponds to the monthly repayment needed to finance only half of the property. We are indeed at a yield of about 3% in cities like Jerusalem or Tel Aviv, quite far from French or American rental yields.
Sources: Central Bureau of Statistics, Yad 2, INSEE, Yedioth Aharonot, Globes, The Marker, Bank of Israel
