A third of Israelis pay high costs for apartment living, according to the 2021 survey run by the Central Bureau of Statistics that examines indicators such as quality of life, sustainability and national resilience. The monthly housing expenditure for 2021 was 3.763 shekels ($1,065) on average for all households, and represented 23% of their total household income.
33% of Israelis spend over 30% of their net income on housing – an expenditure threshold that is far too high, and could lead tenants into poverty or risk apartment owner occupiers losing their property. The situation is particularly serious for apartment renters, over 67% of whom spend a large amount of their income on rent. In the lower income decile, 78% of renters are defined as spending high expenses on housing.
Breaking it down by deciles of net per capita income, the survey found that the lower the decile, the greater the percentage of household expenditure on housing. While the richest spend only 15% of their income on housing – in the seventh decile they spend 23.7%, and in the bottom decile at least 60% – so more than half of their income goes towards housing.
Since 2005, the number of households spending large sums on housing has dropped slightly, but because of a combination of wage erosion and rising prices, a significant jump of 3% was recorded in the number of at-risk households in the bottom decile in 2020. In the seventh and tenth deciles, however, the situation is much less serious, with an increase of only 1%.
Ramat Gan is Israel's most expensive city to live in
In a geographical analysis, Ramat Gan is at the top of the list of the most expensive cities to live in, in relation to residents’ average salaries. About half of Ramat Gan households (48%) spend over 30% of their income on housing. In the rental market segmentation, Bnei Brak leads the list of being most expensive for renters, with over 86% spending over 30% of their salary on housing.
Among the largest cities in Israel, the highest monthly housing expenditure for renters was recorded in Tel Aviv-Yafo at 6,802 shekels ($1,925) per month, and the lowest in Haifa at 2,890 shekels ($818).
In all income deciles, the expenditure on housing amongst those renting was significantly higher than the expenditure on housing among those owning their homes.
In the lower decile, the percentage of the total net financial income spent on housing was between 43.2%-27.8% for those living in apartments they owned and 59.4% for those who were renting. In the top decile, the percentage of total net financial income spent on housing was 16.7%-14.8% among those living in apartments they owned and 28.0% for renters.
This article was translated from Hebrew by Rose Angela.
