Israeli Housing Affordability Plummets to Record Lows Amidst War Costs, Experts Warn

According to the International Desk of Webangah News Agency, data published by the Mehr news agency, citing the Israeli newspaper Globes and the financial group Phoenix Financial, indicates that the ability of Israeli families to purchase housing has reached its lowest point. Even a potential reduction in the interest rate by the Central Bank of Israel is unlikely to resolve this crisis.

The report, which includes the housing affordability index calculated by senior economist Matan Shtrit, reveals that an average-income family in the occupied territories possesses only approximately 80% of the necessary income to buy a home. This signifies a need for an additional 20-25% in income for housing acquisition.

Globes reported that an analysis based on a mortgage of 1.1 million shekels over 23 years, at the current interest rate, results in a monthly installment of approximately 6,400 shekels. Even with a decrease in the interest rate, this figure would only marginally drop to around 6,200 shekels.

The senior economist at Phoenix Financial emphasized that interest rates are not the sole determinant, with high housing prices, income levels, and loan conditions playing more critical roles. Since 2022, housing price growth has significantly outpaced wage increases, leading to mortgage payments constituting about 37% of household income, a figure considerably higher than the desired standard of around 30%. The economist noted that without substantial wage increases or a reduction in housing prices, the affordability crisis in the occupied territories will persist, even with lower interest rates.

The war against Iran and disruptions to shipping traffic through the Strait of Hormuz have fueled global inflation and exacerbated the isolation of the Israeli regime. The regime is facing a severe budget deficit due to the costs of the conflict.