Cost of Living in Israel
The living expenses in Israel are relatively high due to excessive petrol prices. Israel was ranked 3rd among 61 countries with the highest gas prices at 6.35 - 7.60 new shekels per 1 liter (1/4 gallon). The percentage of income spent on gasoline is 2.89%. Petrol prices are reviewed on a monthly basis. However, the current political situation that the country is going through can make living in Israel a challenge. With airstrikes, rocket attacks and kidnappings, expats looking to make a life in the country will need to be extremely vigilant with their living situation.
Water consumption is restricted to Israel. A household of four members is entitled to 10 cubic metres each month while individual water usage is limited to 2.5 cubic metres. Water consumption above these set levels is charged higher than 100 to 300 shekels per month. Electricity in a home with basic appliances (e.g. a washing machine, dishwasher, oven and microwave) costs 250 to 700 shekels monthly. Expats are warned that water and electricity bills will reflect higher amounts as bills are sent out every two months.
Groceries sold in shuks, or fresh produce markets, are much cheaper than those in supermarkets. A family of four may allot 2,000 to 4,000 shekels per month for food and other household essentials at shuks compared with 1,000 to 1,500 shekels in fresh produce markets. It is recommended to visit shuks on Friday afternoons for discounted goods.
Home purchases are concentrated in the main cities of Jerusalem, Tel Aviv, Be’erSheva, Haifa, Hadera, Afula and Modiin. Expats are not restricted from purchasing a real estate property in Israel. However, some state-owned lands may only be leased by Israeli citizens. Lands owned by the Jewish National Fund, which account for 12% of lands in the country, can only be rented out to Jewish citizens or foreigners. It is important to note that purchasing property in the main cities can be a risky move at this period, due to the risks involved. Bombings, terrorism and rockets have damaged properties in the city, so expats are advised to be aware of these threats.
Real estate companies and banks usually request a 40% down-payment for each property purchase. They also require that mortgage payments do not exceed 1/3 of a mortgagor’s monthly income, as mandated by law. A new three-bedroom home in the capital Jerusalem is worth 48,323.28 - 2,772 ILS.4. A similar property within the vicinity of economic zones in Be’erSheva, Haifa, Hadera, Afula costs $2,500 to $5,000 per square metre. Housing is more affordable in Modiin at $2,000 to $2,500 square metres.
Israel’s real estate market has been booming in recent years as the economy accelerates in terms of technological innovations. Residential property loans accounted for 30.8% of the total loans in the fourth quarter of 2012, compared with 26.4% in 2009. The demand is evidently higher in areas near business and technology parks, where companies employ skilled expats. Expats looking to live in the country are advised to be cautious due to the risks that are present.
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