You can save up to $40,000 from the costs of a new apartment, maybe even more, through “Housing Associations”.At a time where prices in the real estate sector are skyrocketing, experts advise citizens to form housing associations to save money!

Ramallah- Palestine Economy Portal | Imad Rajabi-The ideais simple, a group of partners create non-profit associations,buy a piece of land and build an apartment building that includes an apartment for each of them. By forming these associations, partners save the money they would have paid to a seller have each of them decided to buy an apartment instead of building one through the association.

Mohammed Ismael and ten other partners formed one of these housing associations. He says they’ve purchased a land near the town of Surda, to the north of Ramallah, and built an 11-apartment building on it. Each apartment’s size is 170 square meters, and has an excellent finishing compared to investors’ apartments.Also, each of these apartments cost around $90,000, while in the building next to theirs; apartments with the size of 140 square meters cost $130,000.

He adds: “At first, it was difficult to find people whom we can trust as partners, as well as to manage the project, as most of us were employees and had no construction experience.”However, theyhave managed to solve the last problem by hiring an engineering firm to supervise the projectfor them.

Contractor Nassir Shaqbawi recommends the idea of “associations”, as an effective way to save money: “An encouraging method. It saves 25%-35% from the costs of a new apartment. But the real challenge in applying the idea is in finding harmonic people to work together.”

Financial analyst Abdul Karim Serhan encouragespeoplewho plan to buy new apartments to participate in one of these housing associations; assuring it to be an effectiveescape from the housing crisis. He explained that a person can save a lot of money through saving in the costs of land and construction, which form the two main reasons behind the high costs of an apartment.

Serhan adds: through these associations, a person can save up to 40 thousand US Dollars of the cost of an apartment. The total costs are generally divided as follows: 20% are paid for purchasing the land, keeping into consideration that all partners contribute to its cost which reduces each individual’s participation. Other costs are: 40% for construction before finishing phase, and another 40% for finishing the apartments.

Serhan says there are very few official statistics regarding these associations, but that they all remain under the umbrella of personal initiatives. He argues that they are not considered as a competitor to the construction firms, as forming these associations require harmonic people with good and equal financial capabilities to work together, since these associations usually rely on direct payments instead of loans, to save as much as possible.