Let's kick off with the good news: The government unanimously approved the plan of Housing and Construction Minister Yaakov Litzman to give grants to buyers of second-hand apartments in the periphery. But - there's a big catch: a grant strategy this large needs budget allocation, and there still is no budget.
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Other than that, we've grown weary. There was a housing minister, he stepped down, and then came back due to unclear motives. Barring unforeseen surprises, on March 23, we'll go to election again. The Housing Minister will change again, or maybe not. The pendulum policy will remain intact for months.
We had the Zero VAT program, the Buyer's Price Program, the Target Price program, and now the Reduced Price program. The elections will stop everything and even when a new government is formed, somewhere in April, by the time the ministry gets its act together, it will be June-July and a whole year wasted. Two years gone for no reason.
The plan that was approved last week widens existing divides. On the upside, it encourages living in the periphery, but the downside is that it makes living in the center more expensive. Two states for two nations - the nation that has money, and the one that doesn't.
According to the plan, a NIS 100,000 grant will be given to buyers of second-hand apartments in the periphery, in an effort to strengthen cities that have been recognized as national priority cities in the A1 and A2 groups in the housing and construction areas. The cities included are: Eilat, Kiryat Shmona, Kfar Manda, Ofakim, Beit She'an, Dimona, Akko, Nahariya, Migdal Ha'emek, Arabeh, Karmiel, and others.
Another NIS 100,000 grant will be given to anyone defined as someone who has no apartment by the criteria of the Housing and Construction Ministry, and who has not owned one in the past decade, and if the price of the apartment is not over NIS 700,000.
The grants will be given under the following conditions: The price of the apartment is between NIS 250,000-700,000; The size of the apartment is larger than 40sqm; the apartment is suitable for living, as defined by legislation from 1971; the purchase is not a part of the Public Housing law from 1998; the purchase is not being made by a family member; as part of the transaction all of the apartment rights are being purchased, including future rights; and the price of the apartment will be examined by the bank appraiser giving the mortgage, or the bank that the buyer belongs to.
Once the grant is given the buyer must commit to owning the apartment for at least five years. The grant will not prohibit the buyer from getting an adjusted mortgage, according to his personal eligibility and according to the rules of the Housing and Construction Ministry on this issue.
This is all fine. The problem is that the Lands Administration has already approved upping prices of lots for construction in the center of the country for contractors in tenders where the winners are those who offer the highest prices. Cheap land and cheap apartments in the periphery, expensive land and luxury apartments in the center. This is not the way to bridge the divides.
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The construction starts are slowing down, foreign construction workers are not allowed to stay in the country, and demand is increasing. And here we have come to the formula: High demand and low supply. Sorry to say it, but don't expect any drop in prices.
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