The third “Discount Apartment” lottery closed last weekend with 57,043 entries. As part of it, about 3,300 apartments were drawn in 35 projects and 11 localities participated: Jerusalem, Lod, Beer Sheva, Kfar Kasem, Ofakim, Sakhnin, Tiberias, Nof HaGalil, Afula, Emmanuel and Geva Binyamin.
Although this is the smallest lottery that took place this year, it brings with it some interesting data. Four comments on the occasion of its official closing.
Demand has not relaxed outside the center either
75% of the apartments in the lottery are outside the demand areas, and yet the participants continue to “pounce” on apartments. Let’s take Tiberias as an example: in the first lottery, the city offered 444 apartments, and roughly nine applicants competed for each apartment. In the lottery that ended last weekend, about half of the number of apartments was offered, but the number of registrants was three and a half times higher, so that 63 people registered for each apartment.
These data show that the huge demand is not reduced even when the apartments are in the periphery, with one significant caveat: the only two Arab settlements that participated in the lottery, Kfar Qasim and Sakhnin, presented less than a thousand registrants each, and accordingly the number of registrants for an apartment is also significantly smaller.
A big gap in discounts between the center and the periphery
The discounts are what attract the participants to the lotteries, but the differences between the center and the periphery are significant. We note that most of the projects participating in the lotteries are intended to be built in future neighborhoods, so the data presented here in this context are only estimates.
Thus, in the tenders for the projects that participated in the “discounted apartment” lottery in the Morode Afula Ilit neighborhood in Afula, a price per square meter in the discounted apartment, including VAT, was set at NIS 10,176. A comparison with recent transaction prices for new apartments on the free market in the city, around NIS 11,000 per square meter, reflects an average discount of less than NIS 100,000.
In the “discount apartment” projects in the Mosheva neighborhood in Tiberias, the price per square meter is set at approximately NIS 9,000, while the prices of the latest transactions for new apartments express prices ranging around NIS 10,500 per square meter. This is an average discount of about NIS 150,000 for a new apartment.
In Lod, the situation is different: two neighborhoods participated in the third lottery – the International Quarter neighborhood and the Ben Shemen neighborhood. In the Ben Shemen neighborhood in Lod, the price per square meter is set between 14,925 and 15,695, while transactions for the purchase of new apartments carried out this year in the neighborhood express a price of about NIS 19,000 per square meter.
In the International Quarter, the price per square meter was set in the range between 15,522 and 16,031, while transactions for new apartments made this year have already reached a threshold of about NIS 22,500 per square meter. These are, therefore, discounts that can reach more than NIS 600,000 for a new apartment in Lod.
The “shortcut way” to get to the apartment
Looking for “mature” projects within an apartment at a discount? You should take into account the follow-up lotteries, which offer the public apartments left over from previous lotteries. On the one hand, these are less attractive apartments, but precisely in them you can find a high proportion of projects with a significantly shorter distance to occupancy.
Throughout the year, follow-up lotteries were held for 1,746 apartments, in 75 projects. An application was submitted for only one and a permit has not yet been granted, while a full permit has already been granted for 44 projects. For comparison, in the third lottery, permit applications have not yet been submitted for all 35 projects. In the two previous lotteries held this year (245 projects), an application has not yet been submitted in 181 projects, including 12,129 housing units.
The next lotteries and the new government
From a practical point of view, the results of the elections that took place last week heralded a great chance for the formation of a stable government, perhaps for the first time since 2019. Accordingly, talks about the division of the portfolios are already underway. The new minister of construction and housing, whoever he is, will have to, among other things, be required to answer the question of the continued existence of the lotteries.
We note that by the end of the year, the Ministry of Construction and Housing and the Israel Lands Authority plan to hold lotteries for another 9,000 new housing units, in order to reach the goal set by the outgoing government: 30,000 new apartments in lotteries throughout the year 2022.
The Director General of the Ministry of Construction and Housing, Aviad Friedman, announced that another 45,000 apartments will be raffled off next year. It is not known if the new minister will implement this, but there are already statements in that direction.