Published December 16, 2013 by Tzvi Shapiro

House & key picture

This article was printed in the “Op-Ed Contributors” section of the 9/16/2013

Abandoning the life-long dream of aliya is an over-reaction to very real, sometimes foreboding problems.

In her thought-provoking column last week, Adina Siperman raises genuine challenges while announcing her family’s termination of their aliya dream.

The main obstacle, she wrote, was that she didn’t see a pathway to buying a home in Israel. Without diminishing the difficulties she and thousands of other newcomers grapple with daily, we respectfully suggest that abandoning the life-long dream of aliya is an over-reaction to these very real, sometimes foreboding problems.

The bottom line is: Canada and Israel are different. An Israeli who expects to find a certain immediacy and quality of medical care when living in Canada will be disappointed. Yet solutions exist once one becomes familiar with the draconian system in place there.

Similarly, somehow – counter-intuitive and mysterious as it may appear – the vast majority of Israelis do in fact figure out how to make the existing housing system here work for them. So much so that our small country has one of the highest rates of home ownership among young couples in the entire world.

Adina is right in much of what she says: Salaries in Israel do start low and not being a native Hebrew speaker can make advancement harder in many fields. Harder, but not impossible, as I noticed recently in a meeting with a high-level Bank Hapoalim executive who had a distinctly British accent.

We see many top dogs in almost all fields here who originally came from English-speaking countries: energy, finance, medicine, academia, politics, NGOs.

Another bit of good news is that wages are definitely advancing in Israel, up over 25 percent in the past six years. On the other hand, Canadian wages have been flat for years.

Although Israeli salaries start lower, they are moving in the right direction and will increase as the economy continues to thrive.

But the writer’s main complaint involved housing, so let’s examine that particular issue: Government policy and bureaucratic red tape inexplicably create a land shortage, which drives housing prices in Israel higher. At a recent Bank Leumi economic conference, the very first speaker declared: “The biggest problem facing our economy today is the price of housing.”

Yet, attempts are being made to secure affordable housing for Israel’s young families. At the same conference, Benzi Lieberman, head of the Israel Lands Authority, was grilled on freeing up supply to improve the situation.

“We are building 15,000 units in Rosh Ha’ayin, 12,000 units in Modi’in, and 7,500 units in Kiryat Bialik,” he responded. “Within one to two years, you will see more balanced supply and demand and even dropping prices.” Talk is cheap, I know, but if accurate, it seems that the slumbering government may at long last be seeking solutions to the root problem.

At the end of the day, a time honored instrument, the common bank mortgage, is your secret weapon to buying an affordable home, paying it off over time and still having disposable income to enjoy. Two equally compelling corollaries to this must also be kept in mind: Getting that first apartment, even if not your ultimate dream home, gets you squarely into the race, meaning you stop wasting money on rent every month and begin appreciating your bottom line. Even more importantly, you start having equity which will appreciate – sometimes strongly – over time, strengthening your family’s overall financial position in a way nearly no other instrument available to you can.

True, the minimum down payment in Israel is a high 25%, whereas the minimum in Canada is 5%, making it more difficult to purchase a first home here. The absence of a low down payment option is the result of a Bank of Israel regulation, as of November 2012, intended to cool speculation in a skyrocketing housing market. However, houses in Toronto are at a record high too, with an average price of over $540,000.

We also need to address the realities of the situation. I work with mortgages every single day.

I know that if you take 95% financing on an average home in Toronto your monthly principal and interest payments will be approximately $4,000 per month on a fixed-rate mortgage. To live comfortably you would need to earn at least $150,000 a year after taxes. The reality in Israel is far less oppressive than that.

Moreover, Israel is not Canada in one more sense. When the banker in Toronto says “no,” it generally sticks. Here in the land of contentiousness and connections, an initial negative decision can be readily reversed, especially if you have someone at your side who knows the ropes… and the law.

Finally, although the economic advances Israel has made in the past 65 years are astounding, men and women cannot live by bread alone. You still need to stoke the embers of idealism that originally brought you on aliya.

Although I used to work in New York City (which John Lennon called the “Rome” of today), I feel truly blessed and humbled to be able to walk to work every day in Israel.

It has to be about more than just dollars and cents, otherwise, you’re merely following the path of all those individuals who gave up their historic opportunity to live their lives on the center stage of Jewish history for pastures that may or may not have been greener “back there” but certainly were more peripheral.

Related: Current interest rates in Israel and get pre-approved for a mortgage.