About 5% of Israelis will have trouble paying rent due to coronavirus

The Knesset Finance Committee will discuss the state of the housing market on Tuesday. The construction industry reported a 30% increase in apartment sales during June, but the negative trend has resumed since early July. The worsening economic crisis and the increase in the number of job seekers, especially among young people aged 25-35, have encouraged MK Ya'acov Margi's Economic Affairs Committee to discuss the matter. The committee will convene following opposition leader Yair Lapid's request for answers regarding the state of the housing market for young couples during the coronavirus pandemic. Others who have shown interest in the topic are MKs May Golan, Yorai Lahav Hertzanu, Yair Golan and Jaber Asaqla. According to the Knesset research center, in 2018 there were 676,600 households that owned an apartment and paid an average mortgage of NIS 3,617 a month. On the other hand, 731,000 households rented apartments and paid NIS 3,307 a month. The effects of the coronavirus pandemic on the housing market are manifested in four main phenomena: a decrease in household disposable income, a fear of housing foreclosures, an increase in mortgage interest rates and a decline in housing supply. The assumption is that a decline in average wages will make it difficult for homeowners to repay their mortgage, and that 5% of those in disadvantaged households will not be able to meet the repayments. It is estimated that these trends may lead to a fall in house prices and a certain increase in rental prices. At the height of the coronavirus pandemic in April, 12% of renters were not able to pay their rent. A survey of 90 construction companies showed a 30% increase in sales of apartments in June compared to May. The data indicates the optimism in the industry that prevailed before the fear of a second coronavirus wave. Construction and investment company Prashkovsky reported that during June, 24 new apartments sold for NIS 82 million, compared to 17 apartments in May. The construction company Briga reported the sale of 15 apartments in Kfar Yona – an increase of more than 50% compared to May. Eldek Marketing CEO Roni Cohen estimated that the increase in sales was mainly due to housing enhancers moving to more spacious apartments. According to Tali Cohen from the Shapir Group, new buyers want to compensate themselves for reducing expenses in other areas, especially in tourism and travels abroad. Despite the optimistic trends from June, the industry reports that the first week of July is already noticeably slower in sales. This is mainly explained by the surge in coronavirus cases and the resulting economic uncertainty.

About 5% of Israelis will have trouble paying rent due to coronavirus

The worsening economic crisis and the increase in the number of job seekers, especially among young people aged 25-35, have encouraged MK Ya'acov Margi's Economic Committee to discuss the matter.

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About 5% of Israelis will have trouble paying rent due to coronavirus

The worsening economic crisis and the increase in the number of job seekers, especially among young people aged 25-35, have encouraged MK Ya'acov Margi's Economic Committee to discuss the matter.

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