The third round of Israel’s housing lottery project launched this week, with potential buyers applying for a chance to purchase one of 3,300 housing units at a discounted rate of 20 percent less than market value under the “Target Price” (Mehir Matara) system.
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 has a heavy focus on areas in Israel’s so-called “periphery” — the north and south of the country, which tend to have lower socio-economic rankings, but some will be offered in the central regions.
So far, the scheme has proved extremely popular, with more than 100,000 participants in each of the earlier rounds under which 17,000 apartments were raffled. Another 9,000 units will be offered through the system by the end of the year, the ministry said.
The third batch of 3,300 raffled apartments will be built across 11 construction projects over the next few years. The largest number of apartments will be raffled in Beersheba, followed by Lod, Nof HaGalil, Ofakim, Tiberias, Emanuel, Afula, Kafr Qasim, Sakhnin, Jerusalem, and Geva Binyamin.
Potential buyers must apply for eligibility through the Ministry of Housing and Construction, and purchase a certificate of eligibility, renewed annually, at a one-time cost of NIS 240 ($74). Households then register for the chance to “win” the opportunity to buy a discounted apartment.
To qualify, buyers need to be able to demonstrate that they do not already own a home and to indicate where they have been living. The certificate of eligibility then allows entry to all lotteries set to take place in the next year. The government has promised to raffle off about 30,000 affordable dwellings, overall, in 2022.
The lottery system offers a discount of some 20% 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 fund a deposit and borrow as a mortgage.
Once eligibility has been established, applicants can submit up to three choices of location in each lottery round, and are automatically entered for all projects within the location.
Applications for this lottery round close November 3, and winners will be notified by the end of November.
Homes sold through the government subsidy programs made up 22.2% of all new home sales between June and August according to the Central Bureau of Statistics.
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.
Recent figures have shown that housing prices rose by 19 percent over the past year, the highest figure in over a decade, with substantially steeper rises in some areas of the country’s center.