Million Shekels Down Payment Insufficient for Average Nes Ziona Apartment

Purchasing a four-room apartment in Nes Ziona, with an average price of approximately 3.1 million shekels, requires a monthly net income of around 28,400 shekels for those with a 1 million shekel down payment. This down payment covers about one-third of the apartment's cost, exceeding the bank's minimum requirement of 25% for first-time buyers. The remaining 2 million shekels would be financed through a mortgage, resulting in a monthly repayment of about 11,340 shekels. A couple earning two net salaries of 14,200 shekels each would be at the very limit of affordability.

For couples earning a combined net income of 20,000 shekels, a 1 million shekel down payment would only allow for the purchase of an apartment valued at approximately 2.4 million shekels, significantly less than the average four-room unit in the city. These calculations are based on a 25-year mortgage at an average interest rate of 4.7% using the Spitzer repayment method, though actual rates can vary. For every million shekels borrowed, the monthly repayment is roughly 5,670 shekels.

Bank of Israel regulations limit mortgage financing to 75% for primary residences, 70% for those upgrading, and 50% for investment properties. Additionally, mortgage repayments cannot exceed 50% of disposable income, with many banks capping this at 40% to maintain a buffer. A repayment ratio of 30% to 35% of income is considered comfortable.

Each additional 100,000 shekels in equity reduces the monthly mortgage payment by approximately 570 shekels and lowers the required income by about 1,400 shekels. For instance, with a 750,000 shekel down payment on a 3 million shekel apartment, a net income of around 32,000 shekels is needed. Conversely, a 1.5 million shekel down payment reduces the required income to approximately 21,300 shekels, and a 2 million shekel down payment makes the mortgage manageable with a single income.

The 1 million shekel down payment must also cover purchase taxes. For a 3 million shekel apartment, this tax amounts to about 45,500 shekels. After additional costs like legal fees and appraisals, the actual funds available for the apartment itself are closer to 930,000-950,000 shekels, increasing the required net income to around 29,000 shekels.

Three-room apartments in Nes Ziona average around 2.03 million shekels, meaning a 1 million shekel down payment covers nearly half the cost, reducing the monthly repayment to about 5,840 shekels and requiring a net income of 14,600 shekels. Five-room apartments, averaging 4.34 million shekels, are generally unaffordable with only a 1 million shekel down payment as it falls below the 25% minimum.

While the Central District has seen a 4% decrease in apartment prices over the past year, Nes Ziona's four-room apartments have remained stable above 2.9 million shekels. Three-room apartments in the city have seen a slight decrease of about 3%. Neighboring cities like Rehovot and Rishon LeZion offer significantly lower prices for comparable apartments, with a four-room unit in Rehovot averaging 2.44 million shekels, making it more accessible with the same down payment and requiring a net income of approximately 20,400 shekels.