Abstract
This study examines a number of aspects of the housing market during the 2012–2019 period. The study is based on a unique dataset that was created by merging three sources: the “Carman” Real Estate Price Register; Israel Tax Authority files that include the characteristics of salaried employees, including their incomes; and transaction data from the “Buyer’s Price” program. The study first examines the socioeconomic characteristics of first-time home buyers between 2012 and 2015, compared with those between 2016 and 2019, including the characteristics of the purchased dwellings and the distribution of purchases inside and outside of the residential district. A distinction is also made between “Buyer’s Price” purchasers and those in the open market. To the best of our knowledge, this has not yet been done for a representative sample of “Buyer’s Price” purchasers.
First-time home buyers in the open market between 2016 and 2019 have similar characteristics to those who purchased between 2012 and 2015. There are no substantial differences in income between purchasers in the Buyer’s Price program and those on the open market, while the rates of married couples and families with children are higher in the Buyer’s Price program. The dwellings purchased by first-time buyers in the Buyer’s Price program are less expensive and larger than the dwellings purchased on the open market, and price differences in the center of the country are significantly larger than in the periphery. In addition, a higher rate of Buyer’s Price purchasers bought a dwelling outside their residential district.
The study examines the changes that have taken place in the probability of purchasing a first home between the 2012–2015 period and the 2016–2019 period among households that belong to various groups. The results of the estimation indicate that the chance of purchasing a first home increased among all income quintiles, but the gap between the lowest and highest income quintiles widened.
Between 2016 and 2019, the chance of young families, particularly those with children, purchasing a first home increased, partly because these families were the target population for the Buyer’s Price program. The study also found that the chance of purchasing a home in the open market remained stable, and the chance of purchasing a home in the open market in the periphery even increased for the low income quintiles. From this, we can derive that the increase in supply between 2016 and 2019 was more significant than between 2012 and 2015, so the chance of purchasing a home of someone who did not win in the Buyer’s Price lotteries were not hampered.