Apartment buildings
צילום: גדי קבלו
Israelis must work 9.3 years for flat
Salaried employee in Israel must work 9.3 years in order to purchase average new or second-hand apartment, study says
A salaried employee in Israel must work an average of 9.3 years (112 full working months) in order to purchase an average new or second-hand apartment in Israel, according to a study conducted by BDO Ziv Haft for the Contractors Association in Israel.
The data were calculated according to the average gross wage after tax, and an average apartment price was calculated according to data submitted by the Central Bureau of Statistics.
For comparison purposes, the research also checked the situation in other countries. However, in most countries the data referred to new apartments only, thus increasing the gap between Israel and other nations, according to economists in the Contractors Association.
For example, a salaried employee in Canada must only work 6.3 years for a new apartment, in France – 6.9 years, in Australia – 5.9 years for a second-hand apartment and 7.4 years for a new one, in the United States – 7.5 years for a second-hand apartment and 8.9 years for a new apartment, and in England – 8.3 years for new apartment.
The study also examined the change in apartment prices in Israel versus the average monthly wage since 1990.
An average salaried employee in 1990 had to work only 6.6 years (80 working months) for an apartment, but in light of the sharp increase in apartment prices since the beginning of the 1990's there was a gradual increase in the number of working months required to buy an apartment, reaching a peak in 1997, when an average salaried employee was required to work more than 11 years (134 full working months) for an apartment.
Aharon Cohen, president of the Contractors Association, says the reason Israelis have to work so many years to buy an apartment is the high land price in Israel and the high taxation rates collected both from contractors and apartment buyers.
"The taxation rate in Israel has reached 41 percent of the price of a new apartment, and therefore it is no wonder that apartment prices are so high compared to the rest of the world," he said.
