Is it 2008 all over again? It certainly seems that way. The Israeli real estate market is in the midst of one of the largest growth periods ever experienced in the country’s history. Since 2008, housing prices have soared by just about 100%. Being that the average male salary in Israel is roughly $2,500 USD per month (pre-tax), it isn’t a shock that a majority of Israelis either cannot afford homes or struggle to make their monthly mortgage payments. More importantly, this trend is impacting the poor in Israel in a terrible way.
One thing that is often overlooked is the fact that the real estate market plays a crucial role in everyday life. As housing prices increase, so do the prices of various other essential items. Food, electricity, overall cost of living – the average Israeli citizen feels it. But, if you think it’s bad for the average citizen, imagine what it’s like for the needy (which account for more than 25% of Israel’s population).
Even the needy families who own their homes are feeling the heat. Two working parents with several children in the house are quite literally unable to pay their bills at month’s end. And for the families that don’t own? They pay exorbitant rent and often have to move just to stay afloat.
To make matters worse, it seems like Israeli housing prices aren’t going to drop anytime soon. In fact, they are expected to increase from here. A standard 3 bedroom garden apartment in various Jerusalem suburbs are currently being sold for about NIS 1,400,000 – approximately $360,000 USD. These housing prices are destroying the lives of the poor.
We often hear many complaints from potential home buyers in the Israeli market, but the ones suffering the most are the poor. It was hard enough to support the family before the housing bubble; look at how bad the situation currently is.
Unfortunately, there is no quick and easy fix to this problem. Assuming the government takes the right plan and follows it ‘to the T,’ even that will take years to correct the real estate problem. And, as long as this problem persists, we can expect the needy families of Israel to unfortunately suffer even more.
The good news is that Yad Ezra V’Shulamit is here to work directly with many of these families to ensure they have a roof over their heads. Please consider donating today.