The interest rate is rising? The Bank of Israel is raising the cost of mortgages and tightening the terms for obtaining them? It seems that the average Israeli does not really care, or else simply has no choice but to accept real estate market conditions in order to find a way to house his family. The average maximum price for a home that Israelis are will to pay has risen to a record NIS 1.25 million, 24% more than a year ago, according to the semiannual real estate survey for November 2010 by "Globes", Bauman-Ber-Rivnay Saatchi and Saatchi unit Azimuth Advertising, and Mutagim Research Ltd.
The survey presents a picture of the residential real estate market, and specifically, the public's intention to buy an apartment in the next three months. The November survey is the ninth survey of 500 respondents, comprising a representative sample of Israel's adult Jewish population.
The latest survey found that, in the past two years, the average maximum price that Israelis are willing to pay for an apartment has risen 54%, from NIS 810,000 in December 2008 to NIS 1.25 million today. The average maximum price rose 13% from NIS 1.1 million since the previous survey six months ago - at a time when the Bank of Israel has taken a number of measures to cool the real estate market.
The trend began in early 2009. The average maximum price that potential buyers are willing pay for an apartment has been rising steadily by an average of NIS 100,000 every six months. The figure is the average of the highest amount stated by respondents in the surveys, which were launched for years ago.
Azimuth Advertising CEO Benny Keret said, "Although the rise in the maximum price set by homeseekers that they are willing to pay for an apartment is a conceptual price and not the actual price paid, it represents the realization that the rise in real estate prices is real. The public has grasped the rise, and is prepared to pay more to buy the home they want."
Keret attributes the double-digit rise in the maximum price that homebuyers are willing to pay in recent years to a "correction of the anomaly in the real estate market that lasted for a decade."
Mutagim Research CEO Avi Peer believes that this is "a kind of snowball that feeds on itself. The rise in home prices feeds the willingness of homeseekers to pay more because they have no choice. There's an impression that only a major intervention by the regulator - either the Bank of Israel or the government for example - can stop the trend."
Published by Globes [online], Israel business news - www.globes-online.com - on December 8, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010