A recent report from the Bank of Israel found that a record-breaking 50.5 billion NIS worth of mortgages were issued in the last nine months. This surge is in part due to the Mechir Lamishtaken (Buyer Fixed Plan), which accounts for 12% of the figure. Political uncertainty and interest rates that fell from 1.9% to 1.3% have also played a significant role.
While many were moving into new homes, others seemingly abandoned theirs. The Central Bureau of Statistics reported that the number of empty homes in Israel has risen by 24% since 2012.
It seems like a strange problem in a country where many are struggling to find adequate housing. Most unpopulated homes are generally located in desirable areas: major cities. In Tel Aviv, Jerusalem, Haifa, and Netanya, there are a whopping 46,100 empty apartments in total. In Holon, Be'er Sheva and Petach Tikvah the number reached 14,100.
Homes generally become vacant because their owners die without inheritors or live abroad. Many units included in the report were never occupied in the first place. Companies continued to build luxury housing units despite a significant slowdown in sales.
As of 2013, unoccupied housing units, or units in which no one has lived in for nine months, are subject to double municipality taxes. This government ruling intended to discourage the current phenomenon, but there were problems. The order's definition was too vague and ambiguous for local municipalities to implement.
In May, the State Comptroller recommended that the Ministry of Finance and the Ministry of the Interior make changes to the ruling. Doing so would allow the local authorities to enforce it. These recent findings may push the issue closer to the forefront and out of the shadows where it's been lurking for the last few years.
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