The third round of Israel’s housing lottery project launched this week, with potential buyers applying for the chance to purchase one of 3,300 housing units at a discount rate of 20 percent less than market value under the system. of “Target Price” (Mehir Matara).
Target Price, like its predecessor “Buyer’s Price” (Mehir Lamishtaken) from 2015, is aimed at first-time homebuyers, young families, single-parent families and others deemed eligible for discounted housing. The program has a strong focus on Israel’s so-called “periphery” areas: the north and south of the country, which tend to have lower socioeconomic rankings, but some will be offered in the central regions.
So far, the scheme has proven extremely popular, with over 100,000 entrants in each of the previous rounds in which 17,000 apartments were drawn. 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 apartments drawn will be built in 11 construction projects over the next few years. The largest number of apartments will be raffled off 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 a chance to “win” a chance to purchase a discounted apartment.
To qualify, buyers must be able to show that they do not already own a home and indicate where they have been living. The certificate of eligibility then allows entry into all lotteries scheduled for the following year. The government has promised to raffle off some 30,000 affordable homes, in total, by 2022.
The lottery system offers a discount of around 20% on the purchase price of the apartment, as well as 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 prospective buyers need to finance a deposit and borrow as a mortgage.
Once eligibility has been established, applicants may submit up to three placement options in each lottery round and are automatically entered for all projects within the placement.
Applications for this lottery round close on November 3 and winners will be notified in late November.
Homes sold through government subsidy programs accounted for 22.2% of all new home sales between June and August, according to the Central Statistics Office.
Israeli governments have long promised to lower house prices, which have been rising for more than a decade. Skyrocketing costs have put home ownership out of reach for many Israelis, weakening the middle class.
Recent figures have shown that house prices increased 19 percent over the past year, the highest figure in more than a decade, with substantially steeper increases in some areas of the center of the country.