The Ministry of Housing and Construction kicked off the first round of its new housing lottery project on Sunday, with over 10,000 units set to be raffled at a discounted rate of 20 percent less than market value under the new “Target Price” (Mehir Matara) system introduced last year by Housing Minister Ze’ev Elkin.
The ministry and the Israel Land Authority (ILA) said last month that some 30,000 affordable dwellings, overall, will be listed for sale this year.
The first batch of 10,028 units will be built across 150 construction projects in 31 cities including Acre, Dimona, Ofakim, Be’er Ya’akov, Eilat, Ashdod, Haifa, Jerusalem, and Rishon Lezion, according to the Housing Ministry.
“Target Price,” like its 2015 predecessor “Buyer’s Price” (Mehir Lamishtaken), is intended for first-time homebuyers, young families, single-parent households, and other individuals deemed eligible for discounted housing. The program focuses on areas in Israel’s so-called “periphery” — the north and south of the country, which tend to have lower socioeconomic rankings according to the Central Bureau of Statistics.
The lottery system offers a discount of 20% or up to a maximum of NIS 300,000 ($93,460) on the apartment purchase price, in addition to grants of up to NIS 40,000 ($12,460) in certain areas. The discounts can be worth hundreds of thousands of shekels and are designed to reduce the amount that would-be buyers need to find to fund a deposit and to borrow as a mortgage.
Potential buyers must check their eligibility through the ministry, and if approved, must purchase a certificate of eligibility at a one-time cost of NIS 240 ($74). The certificate can be renewed annually. Households then register for the chance to “win” the opportunity to buy an apartment at the discounted rate in areas where they are interested in living.
Registration for this first batch of 10,000 units began Sunday morning and is set to end March 29. The registration website briefly crashed Sunday due to high traffic.
Elkin said in a statement that he was committed to helping young families and those who don’t own a home get a foot on the housing ladder. “After a long hiatus… we are resuming lotteries for apartments at large discounts all over Israel, both in areas of high demand and in the periphery.”
Target Price, like programs before it, is aimed at making homeownership more accessible in a housing market that is seeing spiraling costs amid sky-high demand and inadequate supply.
According to the CBS, apartment prices rose by 13% in 2021 compared to the previous year, with a further increase of 2.1% in January 2022 alone. The total sum of mortgages taken out in February stood at NIS 11 billion ($3.39 billion), the data showed.
The consumer price index rose by 0.7 percent in February 2022, according to the CBS, topping off a 3.5% increase over the last year, which is 0.5% above the Bank of Israel’s target.
Israeli governments have long promised to lower housing prices, which have climbed for over a decade. The sky-high costs have put homeownership out of the reach of many Israelis, weakening the middle class.
In October, the government unveiled a major housing plan for 2022-2025, aimed at rapidly increasing the supply of apartments in the hopes of reducing prices.
Adina Cooper and Times of Israel staff contributed to this report.