A joint survey recently conducted by the Israeli business publication Globes, the advertising and marketing company Azimut and marketing research experts Mutagim Research and reported in Globes, revealed a surprising shift in priorities of the Israeli apartment buyer. While the average Israeli apartment price has yet to fall below 1,000,000 NIS, according to the survey Israelis are now willing to pay an average of 979,000 NIS for an apartment, which is 22% less than what they were willing six months ago. Additionally, the average Israeli buyer is now looking for a smaller apartment than previously.
The survey, taken every six months since 2006, provides data regarding the short-term intentions of Israelis to purchase apartments as well as the public perception of the Israeli real estate market and trends. 500 people, 50% men and 50% women were interviewed representing a cross-section of Israeli society.
7% of those interviewed in December 2011 prefer to buy an apartment with 2 rooms or less, a 5% increase over the same period in the previous year. 26% of those interviewed said they would buy a 3–room apartment, as opposed to 26% in the survey taken six months earlier.
While the demand for 4-room apartments rose drastically from 50% in the first half of 2011 to 61% in December, the number of people looking for 5-room apartments dropped sharply from 23% in June to 7% in the most recent survey.
What is clear from the recent survey is that Israelis are opting for smaller apartments. As financing a new home becomes more difficult, home buyers are giving up on their “dream house” in exchange for what is both affordable and practical. Contractors, realtors and urban planners would be wise to take heed of the needs and preferences of the “New Israeli Consumer”.