Timing is everything

They got in just before the door slammed shut and they know it. "I don't think we could have afforded to buy our apartment at today's prices," says one couple.

"Had we wanted to buy the apartment, we would probably have had to take a bigger mortgage," says another.

These young couples bought apartments before the prices skyrocketed - at a time when you didn't have to part with NIS 1.5 million to claim a Petah Tikva address.

In recent years, the prices of apartments have preoccupied the public more than ever before.

The media obsessively follow the price trends, property value has supplanted politics in water-cooler conversations and everybody is mulling whether or not to buy takes on a gambler's mentality. Buy now or wait half a year? Will prices drop? Can we catch the wave and save 5% - or will we miss it and lose 10%?

The four couples interviewed for this article bought apartments about a year and a half ago or more, without being concerned about "Whither the prices of real estate." Why? Simply because the purchase was the natural and obvious step.

Unwittingly they did the smartest thing, which ensured their economic future.

Shani and Nitzan Moshe bought an apartment about a year and a half ago. If they'd waited, Shani says, they might have been forced to rent now.

"We keep telling ourselves: How lucky that we bought, because we see the crazy prices now as compared to the prices then," says Shani. "I'm glad we did it then, before everything went nuts."

Shani and Nitzan wanted a home of their own. They lived for a while with their parents in order to save money, and when they had the equity they purchased a three-room apartment in Ramat Gan for NIS 740,000, without overthinking the investment value. In the past year and a half the prices have increased: Shani estimates that their apartment is now worth about NIS 1.1 million.

The low price of the apartment is only one part of the story.

Now that they have an apartment, Shani and Nitzan can think about the next one.

"If we want to upgrade, it's true that the prices of the other apartments have also increased, but so has the value of our apartment. All in all we're less at a disadvantage than a couple that has to buy their first apartment now, and has nothing to sell," says Shani. "Talking with friends, we realize that anyone who didn't buy an apartment has a problem now... Once you could buy an old apartment or one in a less attractive area; now even those options are very expensive."

Galia, a pseudonym, and her husband were particularly lucky - they bought a four-room apartment in Shoham at the nadir of the recession in early 2002, after the tech bubble burst and when the country was suffering from frequent terror attacks.

The price of the apartment was NIS 920,000, and after they managed to get a discount as members of a consumer club, they paid only NIS 846,000.

Eight years later Galia sees apartments similar to her's being sold for NIS 1.5 million to NIS 1.6 million.

Until they moved to Shoham, the couple rented an apartment in Givatayim.

For Galia, who works in the capital market, this was a convenient arrangement, and she thought that it might be a good idea to postpone the decision to buy an apartment.

But a little bit of pressure from her parents and a push from her husband led in the end to the decision to make the move.

The couple had to decide between an apartment in Hod Hasharon, near Galia's parents, or an apartment in Shoham close to her husband's work. They fell in love with Shoham, which Galia describes as "a combination of a rural atmosphere with all the services available in a city."

The second dilemma was deciding between a four-room and a five-room apartment. "A five-room apartment cost about NIS 1 million, and at the time we couldn't afford it. We needed a 20-year mortgage for that, and we didn't want to take such a big risk. I know that now it's more common, but at the time only couples who really had no money at all did it."

In order to purchase the apartment they took a mortgage for only 12 years. A few years ago they took advantage of the low interest in the market in order to refinance, and now, at early middle age, they have only six years until they finish paying it off.

When she hears about friends who have to take a 30-year mortgage in order to buy an apartment, Galia understands how lucky she was: "I'm happy that we took this step, especially when I see the prices. In hindsight it was a good decision, and maybe it's a shame that we didn't buy a larger apartment."

Today, Galia admits that in spite of the fact that her salary and that of her husband are significantly higher than in the past, they probably would not have been able to buy an apartment - maybe with a very high mortgage and taking risks that at the time they managed to avoid.

Barak and Dorit Tzruya took the usual route.

"We got married and shortly after the wedding we bought an apartment.

It was because we wanted to find a place where we could raise a family, not because we thought prices were liable to increase in the future."

Until then, they rented an apartment in Givatayim and right before the wedding the rental contract expired and they looked for an apartment to buy.

Their first choice was to buy in Givatayim, but their budget did not allow for a four-room apartment there, certainly not a new one.

The couple purchased a four-room apartment in Petah Tikva about two years ago for NIS 1.1 million, and although today this price seems almost ridiculously cheap, at the time it sounded very expensive to Barak.

Today he estimates that the apartment is worth about NIS 1.5 million to NIS 1.6 million, compared to other apartments that were sold in the area.

The sharp increase in the value of the apartment in such a short time may sound like winning the lotto, but "it's only in theory, I don't really have the money," Barak says.

"It's the best thing I ever did," he testifies, "in terms both of the price and the neighborhood."

He says that had they waited they might still have been able to afford it, though with a much larger mortgage.

"It would have been possible, but the monthly payment would have been higher and for a longer period," he says.

"It was the best thing we could have done," says Dalia, a pseudonym, about the three-and-a-half room apartment she bought with her husband in the old area of North Tel Aviv about five years ago for about $310,000. "Friends who started looking for an apartment together with us and wouldn't compromise on standards such as an elevator or parking can't buy an apartment now, and I think they regret it."

Dalia managed to fulfill her dream of an apartment with one she had inherited in Ra'anana, which she sold for $200,000; it provided her with the financial basis to buy the apartment in Tel Aviv.

The inheritance combined with the relatively low prices in the city at the time enabled the couple to take a relatively small mortgage, with low monthly payments of about NIS 1,500 for 15 years.

Dalia estimates that in spite of the high price of apartments in Tel Aviv at present, she would have managed to buy an apartment in the city because she owned an apartment in Ra'anana.

However, she believes that the value of the apartment in Ra'anana would not have increased at the same rate as the one in Tel Aviv in the past five years, and that therefore she would have had to take out a larger mortgage.

"I don't think that we could have afforded the same apartment at today's prices, unless I had taken a far bigger mortgage with higher monthly payments," she says. "It's such luck. We got married and were tired of living in a rental apartment and there was no reason not to buy an apartment. It's very natural after the wedding, and certainly when you want to start a family. We knew that was possible too.

"I speak to many parents in the children's kindergarten and I feel that we're protected from the real estate jungle outside: We see tenants whose rent is raised to a level that eats up most of their salary, that landlords evict them from the apartment on a whim, people who want to remain in this area and can't afford to rent an apartment and certainly not to buy one."

Dalia's story arouses envy, but when she looks to the future she is pessimistic. "If we want to move to a larger apartment in Tel Aviv we'll be facing the same hopeless situation - because the value of other apartments in the area has increased too."