Israel’s State-Subsidized Housing Lottery Draws 115,000 Applicants for 7,922 Homes Nationwide
The registration for Israel’s 11th state-subsidized housing lottery closed last week, attracting 114,848 households competing for 7,922 apartments across 19 communities. This reflects an average odds ratio of about one winner per 14.5 applicants, an improvement from the previous record lottery with 131,000 applicants for 7,479 homes, where odds were roughly one in 17.5.
The lottery, part of the "Mechir LeMishtaken" (Price for Residents) program, has increasingly become a financial investment opportunity rather than just affordable housing. Deputy Chief Economist at the Finance Ministry, Galit Ben Naim, revealed that among the earliest winners in Lod who signed purchase contracts in April 2016, 43% had sold their apartments by April 2023, with an additional 13 intending to sell. This means nearly half of the winners have capitalized on the program, earning an average nominal profit of about 1.2 million shekels per apartment. Many used these gains to fund subsequent home purchases at median prices significantly higher than the subsidized units.
However, the program’s scope is narrowing. A recent policy limits eligibility to cities where the average price per square meter does not exceed 20,000 shekels, effectively excluding most high-demand urban areas. Despite this, the current lottery still includes projects in expensive cities based on prior tenders. The most popular city in this round was Kfar Saba, with over 38,000 applicants vying for 1,045 apartments, yielding a slim 2.7% chance of winning. Other notable cities included Kiryat Gat and Rishon Lezion, the latter having a particularly low chance of 0.6% due to 23,000 applicants competing for only 148 apartments.
Pricing formulas for winners are complex, involving discounts capped at 500,000 shekels and based on property valuations from 2020, which do not fully reflect current market price increases. Mortgage advisors note that the real discount is often higher than official figures suggest. For example, a four-room apartment in Rishon Lezion is offered at about 2.11 million shekels in the lottery, compared to a market price of approximately 2.8 million shekels, a discount of around 700,000 shekels.
Rising housing prices have also pushed up the required down payments and mortgage amounts. In many sought-after cities, buyers need a mortgage around 1.6 million shekels, requiring a net household income of 23,000 to 27,000 shekels monthly and monthly repayments between 8,200 and 9,700 shekels. The minimum down payment for a four-room apartment in Rishon Lezion is currently about 528,000 shekels, up from 357,000 shekels in 2022. The Bank of Israel has adjusted mortgage rules accordingly, increasing the maximum property value eligible for financing from 1.8 million to 2.1 million shekels and raising the maximum mortgage from 1.35 million to 1.575 million shekels.
This lottery cycle may represent one of the last opportunities for many to access subsidized housing in high-demand areas, as the program’s eligibility criteria tighten and prices continue to climb.
