In her thought-provoking column last week, Adina Siperman raises genuine
challenges while announcing her family’s termination of their aliya
The main obstacle, she wrote, was that she didn’t see a pathway to
buying a home in Israel. Without diminishing the difficulties she and thousands
of other newcomers grapple with daily, we respectfully suggest that abandoning
the life-long dream of aliya is an over-reaction to these very real, sometimes
The bottom line is: Canada and Israel are different.
An Israeli who expects to find a certain immediacy and quality of medical care
when living in Canada will be disappointed. Yet solutions exist once one becomes
familiar with the draconian system in place there. Similarly, somehow –
counter-intuitive and mysterious as it may appear – the vast majority of
Israelis do in fact figure out how to make the existing housing system here work
for them. So much so that our small country has one of the highest rates of home
ownership among young couples in the entire world.
Adina is right in much
of what she says: Salaries in Israel do start low and not being a native Hebrew
speaker can make advancement harder in many fields. Harder, but not impossible,
as I noticed recently in a meeting with a high-level Bank Hapoalim executive who
had a distinctly British accent. We see many top dogs in almost all fields here
who originally came from English-speaking countries: energy, finance, medicine,
academia, politics, NGOs.
Another bit of good news is that wages are
definitely advancing in Israel, up over 25 percent in the past six years. On the
other hand, Canadian wages have been flat for years.
salaries start lower, they are moving in the right direction and will increase
as the economy continues to thrive.
But the writer’s main complaint
involved housing, so let’s examine that particular issue: Government policy and
bureaucratic red tape inexplicably create a land shortage, which drives housing
prices in Israel higher. At a recent Bank Leumi economic conference, the very
first speaker declared: “The biggest problem facing our economy today is the
price of housing.”
Yet, attempts are being made to secure affordable
housing for Israel’s young families. At the same conference, Benzi Lieberman,
head of the Israel Lands Authority, was grilled on freeing up supply to improve
“We are building 15,000 units in Rosh Ha’ayin, 12,000
units in Modi’in, and 7,500 units in Kiryat Bialik,” he responded. “Within one
to two years, you will see more balanced supply and demand and even dropping
prices.” Talk is cheap, I know, but if accurate, it seems that the slumbering
government may at long last be seeking solutions to the root problem.
the end of the day, a timehonored instrument, the common bank mortgage, is your
secret weapon to buying an affordable home, paying it off over time and still
having disposable income to enjoy. Two equally compelling corollaries to this
must also be kept in mind: Getting that first apartment, even if not your
ultimate dream home, gets you squarely into the race, meaning you stop wasting
money on rent every month and begin appreciating your bottom line. Even more
importantly, you start having equity which will appreciate – sometimes strongly
– over time, strengthening your family’s overall financial position in a way
nearly no other instrument available to you can.
True, the minimum down
payment in Israel is a high 25%, whereas the minimum in Canada is 5%, making it
more difficult to purchase a first home here. The absence of a low down payment
option is the result of a Bank of Israel regulation, as of November 2012,
intended to cool speculation in a skyrocketing housing market. However, houses
in Toronto are at a record high too, with an average price of over
We also need to address the realities of the situation. I work
with mortgages every single day.
I know that if you take 95% financing on
an average home in Toronto your monthly principal and interest payments will be
approximately $4,000 per month on a fixed-rate mortgage. To live comfortably you
would need to earn at least $150,000 a year after taxes. The reality in Israel
is far less oppressive than that.
Moreover, Israel is not Canada in one
more sense. When the banker in Toronto says “no,” it generally sticks. Here in
the land of contentiousness and connections, an initial negative decision can be
readily reversed, especially if you have someone at your side who knows the
ropes... and the law.
Finally, although the economic advances Israel has
made in the past 65 years are astounding, men and women cannot live by bread
alone. You still need to stoke the embers of idealism that originally brought
you on aliya.
Although I used to work in New York City (which John Lennon
called the “Rome” of today), I feel truly blessed and humbled to be able to walk
to work every day in Israel. It has to be about more than just dollars and
cents, otherwise, you’re merely following the path of all those individuals who
gave up their historic opportunity to live their lives on the center stage of
Jewish history for pastures that may or may not have been greener “back there”
but certainly were more peripheral.
The writer is managing director at
First Israel Mortgage LTD., (www.firstisrael.com ) a Jerusalem based mortgage
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