בעלות או שכירות : בחינה כלכלית של כדאיות סוג החזקה בנדל"ן למגורים בישראל

Nahmani Dana and Danny Ben-Shahar (Advisor)

Approximately 70% of the population in Israel lives in self-owned homes, a rate which is relatively high compared to other Western countries.

The real estate tenure mode, in particular, ownership versus rent, is a widely debated issue in literature from the economical-rational aspect (as well as other aspects). This study examines the economic feasibility of residential real estate ownership in Israel versus the rental option, based on price data published by the Central Bureau of Statistics (CBS) for three major cities in Israel – Jerusalem, Tel Aviv and Haifa – and information about metropolitan regions (as defined by the CBS): Gush Dan, The Center, The South, The Sharon, The North, and Haifa’s suburbs (Ha’krayot) in the years 1994-2007. We compare the potential financial value equivalent of a household with a given income under two possible scenarios: one in which a residential real estate is purchased, and the other in which the same housing unit is rented and the money saved is used for alternative investments such as various combinations of debentures, bonds and stocks. The Economic analysis in question focuses not only on various regions of the country, but also on different apartment sizes, a variety of mortgage types and the various savings alternatives.

We found that if a household saves the full sum of the down payment from a potential purchase of an apartment in addition to 100% of the current difference between rent and mortgage payments, in most examined scenarios, renting is financially more profitable than purchasing. This finding holds for every region in Israel, for the different apartment sizes, at different points in time, and for various mortgage loan conditions (loan duration and loan-to-value ratio). In contrast, when a renter saves only 50% of the down payment and the current difference between rent and mortgage payments, in most regions, apartment purchasing is more beneficial. Given this finding, for such households with no "savings discipline", apartment purchasing is found to be a sensible alternative to savings plans. The research further suggests that certain variables, such as the time at which the mortgage is taken, its duration, the loan-to-value ratio (LTV) and the apartment size carry very limited effect on the real estate holding preference.

In sum, the findings that emerge from this study indicate that in most cases the rational-economic decision is to rent a dwelling asset and investing the cash in alternative financial investments.

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