During his term as minister of finance, Moshe Kahlon waged war against real estate investors. He raised taxes on them, and reduced the number of housing units owned by them by 20,000. The number of investors, however, or at least those owning two or more housing units, has reached a peak during his term in office. According to figures from the Central Bureau of Statistics published today, one of every ten households owns two or more homes, up from 9.1% of households in 2014.
In contrast to the prevailing belief, the Central Bureau of Statistics found that the proportion of home ownership in Israel was higher than some other places in the world; on the other hand, the proportions of Israeli households that own a home is substantially lower than in most European countries.
An increase in economic gaps
On the one hand, 718,000 households, 27.5% of the total in Israel, owned no home whatsoever in 2018, compared with 28.2% in 2017, leading to the conclusion that many households that did not own a home bought one in 2018, some of them possibly through the Buyer Fixed Price Plan and the Target Price Plan.
Purchasers of these homes were among the 1.6 million households in 2018 (62.4% of all households in Israel) owning only one home and 210,900 households (8.1% of all households) owning two homes. 53,400 households (2% of all households) owned three or more homes.
This requires explanation, especially in view of the findings by the Ministry of Finance chief economist and reports from the sources in the field that investors are abandoning the real estate market, and have bought few homes since 2016, with the inventory of housing units held by them declining by 20,000.
There are a number of possible explanations. It is possible that while investors owning more than one housing unit are reducing their holdings, there are also owners of one home who are buying additional ones. The stock of housing held by investors is therefore decreasing, but the number of investors is increasing. In any case, the figures show an increase in the proportion of people owning more than one housing unit, although the rate of increase in the proportion has been lower in recent years than it was in 2007-2014. In addition to slowing the pace of housing price increases, Kahlon is therefore also entitled to take credit for slowing the rate of increase in the proportion of investors.
When the proportion of households that owns homes is examined, however, it turns out that the rate fell by 3.7% in 1997-2018. In other words, although the number of investors is increasing, the number of people who do not own homes is also increasing, possibly hinting at an increase in economic gaps between social classes.
Published by Globes, Israel business news - en.globes.co.il - on January 14, 2020
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