Will we enjoy the great potential of long-term rental in the coming years? A special panel moderated by real estate editor and commentator Ofer Petersburg at the annual Mizrahi Tefahot Bank mortgage advisors conference addressed this important issue. Inbal David, CEO of Apartment for Rent, declared that "long-term rental housing must be one of the housing solutions available for the next generation, allowing them to choose between buying an apartment, renting on the free market, or long-term renting."
David added, "In the last two decades, the proportion of households renting in Israel increased from 24% to 33%. The scope of institutional rent in Israel is relatively low compared to OECD countries, and we should strive to catch up with models in large cities like Berlin and London."
David noted that a tender was recently closed successfully in Migdal Ha'emek, offering over 102 units for long-term rental. She mentioned that "Apartment for Rent is engaged in planning large-scale housing projects nationwide, including doctors' housing in Ramat Gan and Hod Hasharon. Thousands of rental apartments are advancing their planning, with 30% intended for long-term rental on both state and private lands. The goal is to maintain a high rate of marketing and offer incentives that increase the viability for developers."
"At the beginning of the interest rate hikes, there was concern about families who purchased apartments."
Matan Yigal, Deputy Commissioner of Budgets at the Ministry of Finance, addressed the issue of the 20/80 balloon loans facilitated by developers, stating: "We are not afraid of high-interest loans as banks act responsibly in providing mortgages, ensuring households can meet repayments. Initially, there was concern about families who purchased apartments at low interest rates facing significant repayment increases, but we have seen no substantial change in arrears rates despite the higher monthly payments."
Yigal added, "Despite budget cuts due to the war, the state prioritized reservists with discounts on land and priority in housing price projects."
Regarding government policy to stimulate the construction market, Yigal noted, "The government invested 2 billion shekels in the last budget to maintain real estate marketing rates, ensuring construction starts in the coming years. Additionally, the government supported the institutional rental market by attracting private and institutional investors at up to 40% per project and promoting legislation to ease financial burdens for developers through deferred VAT payments."
The annual Mizrahi Tefahot Bank mortgage consultants conference addressed the challenges of the real estate and mortgage market during the war. Participants included CEO of Mizrahi Tefahot Moshe Lary, Director of the Bank's Retail Division Shabi Shemer, CEO of Apartment for Rent Inbal David, Deputy Commissioner of Budgets at the Ministry of Finance Matan Yigal, Chairman of the Association of Mortgage Consultants Nofer Ya'akov, Chairman of the Chamber of Realtors Itzik Levy, Partner at the Appraiser's Office Oshner Malol Yaron Malol, Director of the Mortgage Branch at Mizrahi Tefahot Bank Dror Feldman, and his deputy Sharon Ben Yehuda, who moderated the conference.