Title: Government’s “Resident Price” Program Drives Significant Increase in Housing Prices
Subtitle: Winners of the lottery program set to profit from over 100% price increase
Date: [Insert Date]
Introduction:
In a test conducted by Globes, the impact of the government’s “Resident Price” program on housing prices and the housing crisis was examined. The program, which was launched eight years ago, aimed to provide affordable housing solutions to young couples. As the first winners of the program from 2016 approach the sell date, it is anticipated that their apartments will enter the free market, leading to a significant increase in housing prices. This article presents the findings of the study and highlights the neighborhoods that have already seen a rise in prices.
Lotteries and Winners:
Over 100,000 individuals have won a resident price plan since the program’s inception. Various lotteries, such as Moshe Kahlon’s “Price for a Resident” and the current “Discount Apartment,” have been held to allocate apartments to eligible participants. The article explores the leading cities where these lotteries took place and investigates the impact on housing prices.
Significant Increase in Housing Prices:
The sale of apartments won through the lotteries is governed by specific conditions, typically allowing the sale five years after receiving Form 4 (occupancy form) for the respective project. In the case of the Ahismach neighborhood in Lod, the first winners can already sell their apartments from March of this year. The study compares the prices of apartments won through the program with free market prices in three neighborhoods – Ahismach, Mishkan Omen in Kiryat Motzkin, and Pisgat Ze’ev in Jerusalem – and reveals a substantial increase in value.
For instance, winners who purchased an apartment in Ahismach in 2016 for an average price of NIS 800,000 can now sell their property for approximately NIS 2.039 million, marking a 155% increase in price. Similarly, apartments in Kiryat Motzkin, won through the lottery in June 2016, have seen a 119% increase in price compared to the original cost. The upcoming sale of apartments in Pisgat Ze’ev is expected to yield a 120% price increase since the lottery purchase.
Implications and Future Outlook:
The findings of the study raise concerns about the profit-driven motivations of lottery winners, as approximately 50% of winners surveyed had no intention of living in the apartment and viewed it purely as an investment. Real estate experts, like Shamai Shmulik Cohen, partner and owner of SK Shamao Ma’toin, highlight the need for reforms in the lottery system to ensure that these affordable apartments reach those who truly need them.
Furthermore, amidst the recent cooling of the housing market, there are speculations that the current “reset” might lead to a reevaluation of the entire program. It is suggested that changes should aim to prioritize the distribution of benefits to individuals in genuine need of affordable housing.
Conclusion:
The “Resident Price” program has significantly impacted housing prices, with winners poised to enjoy substantial profits from the sale of their apartments. As more apartments enter the free market, the government may need to reevaluate and reform the lottery system to ensure the program’s goals of providing affordable housing to those in need are met.