High housing prices in Israel create a barrier to home ownership in Israel, especially for young Israelis.
“The share of young households (ages 25-34) that do not own an apartment rose from about 43 to 54 percent in nine years,” according to home ownership research conducted by the Taub Center for Social Policy Studies published in January of 2016.
A 2014 Haaretz article on housing in Israel called home ownership for young Israeli couples “a distant dream.” Thanks to the Israel Investment Project, a new, start-up investment program designed to help young Israelis find first homes, that dream may now be less remote. Below, Alex Brosh of the Israel Investment Project was kind enough to answer questions about the promising new initiative.
KNI: What is the vision of the Israel Investment Project (IIP)?
Alex Brosh: Our vision is to help young Israeli couples purchase their first asset in Israel.
KNI: What is the project’s principle motivation?
Alex Brosh: There is a problem in the Israeli real estate market: A shortage of available housing and low construction rates resulting in very high prices. A typical young couple who want to buy their first asset in Israel will probably have to take a mortgage. The banks usually require a down payment between 25 to 40 percent of the asset’s value, a high threshold that prevents many young people from entering this market.
On the other hand, young prospective buyers usually make monthly rent payments comparable to the mortgage payments they would pay if granted a mortgage. Unless these young people receive money from their parents or other sources, it is hard for them to accumulate the cash required to make the purchase possible.
Taking loans to cover the gap usually doesn’t help because they can be expensive and increase the risk of mortgage default. The Israel Investment Project has created a legal way to solve the down payment problem for these couples. Everyone will not be eligible to participate, but it can serve as a solution for a large part of Israel’s young population.
KNI: Is the IIP an instrument designed exclusively for foreign investors?
Alex Brosh: Absolutely not, but foreign investors will be relatively more profitable, especially in terms of tax savings.
KNI: How do you plan to promote the IIP?
Alex Brosh: We will write articles, personally contact potential investors and advertise.
KNI: What is the project’s progress to date regarding list development and bringing the investment platform to market?
Alex Brosh: At this stage, we have a high degree of interest from potential purchasers and a few serious investors that are willing to investigate the opportunity we have presented to them. In the near future, we plan to establish a management company to include lawyers, realtors and accountants.
Right now, interested parties are invited to contact us directly. Soon we will have a project website and project pages appearing on social media platforms such as Facebook.
KNI: What else would you like to tell Kehila News Israel readers about the IIP?
Alex Brosh: We believe the Israel Investment Project will offer investors a unique opportunity. Why choose to invest in the project? Because it is more than an investment. As well as reaping economic benefits, investors will help young Israeli couples acquire their first home in Israel. Supporting young families today is an investment in Israel’s tomorrow. Hundreds of young couples find it difficult to purchase a home in Israel today. We believe our project has the potential to change this.
Contact Information: Cohen, Pex, Brosh, Amal 37 Expert Building
Petach Tikvah, 4951337
Phone: 03-6979486
US: 347-436-7672
[email protected]
www.lawoffice.org.il
Investment Opportunity: $100k – $500k
Investment Term: 5-15 years
Thanks to Alex Brosh and the Israeli Investment Project team for taking the time to answer our questions.