Housing Prices and Housing Preferences in Israel

Abstract

Israel's housing market differs from other countries in that most of the urban population lives in owner-occupied apartments in multi-family buildings. This paper is concerned with the implications of this situation for housing preferences. The study is based on the prices of a sample of apartments offered for sale in the Tel Aviv metropolitan area. Using multiple regression analysis hedonic price indexes were obtained for a large number of characteristics of the apartment, the building, adjacent properties, the neighbourhood and the location in the metropolitan area. It was found that a premium is paid for characteristics which facilitate maintenance and for features which serve as indicators for the social composition of the neighbours and their attitudes.