Four-Room Apartment in Rehovot Sells for $670,000, Requiring $24,000 Monthly Net Income

A four-room apartment in Rehovot was sold in the second quarter of the year for an average price of approximately 2.44 million shekels (about $670,000), according to data from the Central Bureau of Statistics based on 81 transactions. The median price for a four-room apartment in the city is around 2.45 million shekels. To afford such a property with a 30% down payment, a household needs a net monthly income of about 24,000 shekels (approximately $6,600).

This calculation assumes a 25-year mortgage with a "Shpitzer" repayment plan and an average interest rate of 4.7%. The actual interest rate depends on the chosen loan mix and the borrower's profile with the bank. For a 2.45 million shekel apartment with a 735,000 shekel down payment, the mortgage would be around 1.72 million shekels, resulting in a monthly repayment of approximately 9,700 shekels.

The required down payment is a critical factor. Every 100,000 shekels (about $27,500) more in the down payment reduces the monthly repayment by about 570 shekels and the required net income by approximately 1,400 shekels. With the minimum 25% down payment (around 610,000 shekels), the mortgage is about 1.84 million shekels, with monthly payments of roughly 10,400 shekels, necessitating a net income of about 26,000 shekels.

Bank of Israel regulations limit mortgage financing to 75% for a first-time buyer, 70% for those upgrading, and 50% for investors. For a 2.45 million shekel apartment, this means a minimum down payment of 612,000 shekels for a first-time buyer, 735,000 for upgraders, and 1.225 million for investors. Banks also generally limit mortgage repayments to 40% of income, with many preferring to stay below 35% to allow for other household expenses. At a 30% repayment ratio, a four-room apartment with a 30% down payment would require a net monthly income of about 32,500 shekels.

Average prices for four-room apartments in Rehovot have slightly decreased, from about 2.49 million shekels in the first quarter to 2.44 million in the second quarter. In the "Dutch" neighborhood, prices have dropped by about 9% over the past year. In comparison, a four-room apartment in nearby Rishon LeZion averaged about 2.5 million shekels in the second quarter, requiring a net income of approximately 24,800 shekels with a 30% down payment. The average price for a four-room apartment in the Central District was around 2.55 million shekels.