http://www.buypropertyinisrael.com/ KohanaPHP Sun, 01 Apr 2012 18:55:04 -0500 http://www.buypropertyinisrael.com/news/knesset-approves-housing-reform-measures The Israeli cabinet recently unanimously approved the housing chapter of the Trajtenberg Report, eight months after the recommendations were submitted. The recommendations sought to respond to demands for affordable housing in last summer's social protest. The reforms which were passed by the Knesset will basically seek to get more housing stock into the Israel real estate marketplace by doubling the property taxes on a variety of properties that sit vacant for extended periods of time. The social protests of last summer, brought to light the fact that there are a lot of vacant apartments and abandoned buildings in Israel's large cities.  Some of these properties are vacant because foreign owners only use the apartments a few weeks per year.  These apartments have been referred to as "ghost apartments".  To bring "ghost apartments" on to the market, the property tax ceiling on apartments that stand empty for over six months a year will be doubled. The government estimates that this measure will add to the market 15,000 apartments a year in high demand areas. As for apartments deemed unfit to live in, the exemption on the property will be valid for only nine months, after which the double property tax will be levied on apartments that are not renovated.  Hopefully, this will provide some incentive for building and apartment owners to "get busy" with renovations and get the property to market. To prevent contractors who win tenders from delaying in building, a levy of up to 10% of the price of the apartments built will be imposed for not completing construction projects within two years from the receipt of the building permit. By Lyle Plocher March 31, 2012   Thu, 08 Mar 2012 10:28:11 -0600 http://www.buypropertyinisrael.com/news/israel-bank-officials-concur-no-drastic-declines-in-real-estate-prices-for-2012 Although banking officials in Israel are not in complete agreement about the direction of Israel's real estate market in 2012, there is one thing they do all agree on.  In recent statements made by a variety of bank officials in Israel, they basically all predicted either a slight rise in real estate prices or a slight decline, with none of them predicting a drastic drop in prices. Bank Leumi officials recently stated that if housing starts don’t begin to increase again soon, real estate prices in Israel could once again begin to rise in the not too distant future, although not to the degree they have over the past three or so years.   Bank Leumi made this statement in spite of the fact that the current unsold inventory of new apartments is the highest it has been in the last few years.  Their reasoning is that housing starts in the 4th Qtr of 2011 were down 13% from the 3rd Quarter and down 8% compared to the 4th Qtr of 2010. Echoing Bank Leumi’s statements, Bank of Israel Research Department Director, Prof. Nathan Sussman actually predicted a moderate rise in real estate prices this year during a recent Globes real estate conference. Disagreeing slightly with the Bank Leumi statements and the Bank Of Israel predictions, Bank Hapoalim chief economist Leo Leiderman a few weeks ago predicted that home prices would fall this year by single digits.  According to the Globes article where Leiderman was quoted, over the last 20 years, there has never been a double digit decline in real estate prices.  The largest price decline in Israel real estate prices was 5.9%  in 2003, a year filled with suicide bombings in Israel. Israel classifed ads website Homeless, just released figures for February showing that asking prices for apartments in the outlying areas of Israel dropped slightly while asking prices and rents in Tel Aviv & Jerusalem actually rose slightly. The sense one gets from all of this information is that perhaps those buyers who sat on the fence during much of 2011 may be starting to venture back into the real estate market. By Lyle Plocher March 8, 2012 Sun, 04 Mar 2012 12:44:58 -0600 http://www.buypropertyinisrael.com/news/billionaires-seem-to-like-israel Donald Trump has become the latest of the world's Billionaires to express an interest in investing in Israel.  According to YnetNews, Trump met over the last weekend in February, with Israel's Tourism Minister, Stas Misazhnikov to discuss the Tourism and Real Estate industries in Israel.  Apparently the meeting went well enough that Trump is plannning a trip to Israel in the very near future to size things up. Of course Warren Buffett, another Billionaire from the U.S. already owns 80% of a very successful Israeli company and has indicated he is always looking at additional investment possibilities in Israel. British Billionaire Alan Howard, who happens to be Jewish, is in the process of building a $100 Million mega-estate in Herzliya Pituach.  This was also recently reported by YnetNews.  When completed, the property will be the most expensive residence in Israel.  Reports say Howard will transform the property into a  compound with 8 separate villas.  Howard owns the 4th largest Hedge Fund company in the world and resides at the present time in London. In early 2011, European Jewish Billionaire Alexander Mashkevitch announced his intention of investing in Israel.  Mashkevitch, who also lives in London, is originally from Kazakhstan and is the head of the Euro-Asian Jewish Congress.  Mashkevitch made his fortune in the Mining industry. By Lyle Plocher March 4, 2012   Sun, 23 Oct 2011 13:08:51 -0500 http://www.buypropertyinisrael.com/news/what-s-really-happening-in-the-israel-real-estate-market It's been nearly 4 months since what we might call a normal real estate market has been in play in Israel.  What do I mean by normal?  A real estate market where the normal market forces of "supply and demand", dictate the buying and selling activity, prices, etc.  Events in Israel and around the world over the course of the last 4 months have kept a lot of potential buyers out of the Israel real estate market as many who might be considering a property purchase, watched events unfold from the sidelines.  First, in July and August, the tent protests which swept across Israel, had a dampening effect on potential buyer plans, then September rolled around and many people both inside and outside of Israel were pre-occupied about the Palestinian threat to seek statehood recognition at the U.N..  No sooner had that whole crisis passed when it was time for Rosh Hoshanah, Yom Kippur and the just concluded Sukkot holidays.  During this rather extraordinary period of time, there has been a great deal of speculation in the press and lots of discussion by industry leaders and government officials about the direction real estate prices in Israel may take.  While sales volume has definitely dropped significantly during this period of time, prices do not seem to have dropped significantly.  Actually, a rather surprising statistic was just recently released by the Israel Central Bureau of Statistics stating that real estate prices in August of this year were actually up 0.8% over the previous month. So what's the real story with the Israel Real Estate market?  I think we will soon find out.  My guess is many of those who have been on the sidelines will cautiously resume their property search and that it won't be long before the "market forces" of supply and demand will once again dictate prices. by Lyle Plocher October 23, 2011   Mon, 29 Aug 2011 05:21:25 -0500 http://www.buypropertyinisrael.com/news/israel-real-estate-market-quiet-but-prices-have-not-dropped-dramatically Although the real estate market in Israel has slowed considerably from the past few years, it's difficult to tell yet how much of the slowing is due to the hot summer months, tent protests in Israel, shaky economic conditions in the US etc.  Israel's Central Bureau of Statistics just released a variety of figures regarding the sale of new apartments in Israel.   A close look at some of those statistics do show that the number of new apartments sold in Israel in July of this year were significantly lower than the same month one year ago.  However, the number of apartments sold in both Tel Aviv and in Jerusalem in July of this year were slightly higher than the previous month of June.   In June of this year, 202 new apartments were sold in Tel Aviv and in July, there were 207 new apartments sold.  In jerusalem, there were 79 new apartments sold in June and 102 sold in July.  For the country as a whole, there were 1276 new apartments sold in June and 1291 sold in July. The Ministry of Finance reported that the average price for a new apartment was 2.9% lower in the second quarter than in the preceding quarter. The biggest declines were in Jerusalem and the Sharon, down 6%, followed by a 4% drop in the Central Region. The average new apartment price in Tel Aviv fell by 0.5%. Haifa bucked the trend, with a 1% rise in the average price of a new apartment.   While the number of new apartments sold is definitely down from a year ago, the prices have not dropped dramatically.  by Lyle Plocher August, 29, 2011 Tue, 09 Aug 2011 05:11:43 -0500 http://www.buypropertyinisrael.com/news/are-israel-real-estate-prices-on-the-decline That is the question that is on many people's minds right now.  The tent protests in Israel over the last few weeks seem to have put many potential buyers on stand-by mode. I think the correct way to analyze this question of declining price possibilities is to separate your analysis into 2 categories: The first category would relate to normal market forces: Are high prices in and of themselves forcing a slowdown in the Real Estate Market?  If in fact high prices are playing a role in the current slowdown, then what are the market forces that will come into play as things begin to pick up again?  Is the demand all of a sudden diminished because people are unwilling to pay the current prices?  Is the supply of both new and second hand apartments going to grow and consequently Sellers will have to compete with more listings on the market?  We don't know the answer to these questions yet. The second category would be how much the tent protests will really affect market prices: The recent protests in Israel about the affordability of housing have certainly caught the attention of the Government.  The Prime Minister and others in his government have acted to attempt to correct the insane bureaucracy that currently dictates that the Development Process moves at a snail's pace.  The reality is that the changes that have been made by the Israeli government will not be felt by the Real Estate market for at least a few years.  Regarding the ongoing tent protests, I would suspect that as soon as the Press stops covering their efforts and their plight, that the movement will lose steam and die out. So where does that leave us?  When the protests die down, we will once again be left with the "market forces" being at work. My personal opinion is that we will begin to see kind of a roller coaster effect, as opposed to a downward spiral.  There will always be those who have to sell right now and those who want to buy right now.  The others will either take their properties off of the market or will postpone their purchase.    By: Lyle Plocher August 9, 2011 Tue, 12 Jul 2011 11:02:42 -0500 http://www.buypropertyinisrael.com/news/now-may-be-the-time-to-buy-that-apartment-in-israel For the last several years, Israel has enjoyed an appreciating Real Estate market.  Estimates as to the increase in property values over this "boom market" period vary widely, but they have been significant amounts. The Bank of Israel just released a survey and the researchers who produced the survey say if there is a real estate bubble in Israel, that it is in the early stages and not yet supported by data.   However, statistics coming out from May and June of this year definitely indicate the market is starting to cool off.  According to statistics released by the Ministry of Finance, the number of real estate transactions in the country was down 14% in May of this year over May of 2010 and the market share of apartments bought for investment fell to 23% from 31.1% in May of 2010.  Prelimnary data for June point to a level of sales that would be the lowest since June 2004. The apparent slowing down plus a few other factors are creating an interesting window of opportunity for those who are in a position to buy property in Israel at this point in time.  A consumer confidence survey just completed in June by Globes indicated that only 6.4% of Israeli adult respondents expressed an interest in buying an apartment in the next 3 months.  That figure is the lowest in over a year and has fallen for three consecutive months.  The other factor that is at work at present is the weakening dollar.  Since February of this year, the dollar has declined 8% against the shekel and there are no signs on the horizon that this trend is going to reverse anytime soon. With less competition from Israeli buyers and Sellers who are probably more negotiable than they have been in years, this appears to be an opportune time for those U.S. citizens who operate in dollars, to make a move, before losing any further purchasing power. By: Lyle Plocher July 12, 2011 Mon, 27 Jun 2011 14:18:36 -0500 http://www.buypropertyinisrael.com/news/recent-mortgage-changes-in-israel-have-little-effect In April of this year, The Bank of Israel issued a directive to Banks that effective May 5th, 2011, all new variable rate mortgages could only have 1/3 of the total amount of the mortgage at a variable interest rate, with the rest of the mortgage being at a fixed rate.  This move on the part of the Central Bank was an attempt to reduce risk to their borrowers in the event the Bank has to continue to raise interest rates.  The Central Bank has recently been raising interest rates in order to help cool off the Israel real estate market.  Variable rate mortgages have been popular in Israel, especially with the very low interest rates of the last several years.  In the past year, 85% of the mortgages issued were variable rate.  Apparently, The Bank of Israel announcement sent people hurrying to their banks to get a mortgage before the new changes took hold.  Globes recently reported that May was a near all-time record high for Mortgages with NIS 4.8 billion in new mortgages being issued.  Variable interest mortgages accounted for 86.6% of the total mortgages issued in May.  The Bank of Israel has repeatedly warned of a "housing bubble" and does not want to see a repeat of what happened to many borrowers in the U.S. when their monthly mortgage payments increased to unmanageable levels. Source: Ynetnews June 27, 2011 Sat, 11 Jun 2011 15:33:56 -0500 http://www.buypropertyinisrael.com/news/is-the-israel-real-estate-market-finally-cooling-off After a few years now of ever increasing real estate prices, could the real estate market in Israel actually be leveling off?  Information coming out from a variety of sources this month seems to indicate that the market may be entering a "flattening" period in terms of price and purchase activity. A couple of trends that were reported on this month, give some validity to the premise that the real estate market may be entering a period of "sanity".  The first trend is that of "apartments purchased for investment".  The Ministry of Finance reported earlier this month that apartments purchased for investment fell to 25.8% of all home purchases for the first quarter of 2011.  This is the lowest proportion since 2004.  At the peak of Israel's recent home price escalation, apartments purchased for investment accounted for 35% of all home purchases.  The Israeli government's step of increasing the Purchase Tax on apartments purchased for investment, along with recent interest rate increases by the Bank of Israel, appear to be taking effect. The other trend that will contribute to the possibility of a cooling off of the market is the number of housing starts.  The Central Bureau of Statistics reported earlier this month that housing starts were up 16% in the first quarter of 2011 over the corresponding quarter of 2010.  There were 11,270 housing starts in the 1st Quarter of this year,  this kind of activity has not been seen since the 3rd quarter of 2000. It has been reported that demand for apartments in April  was down, but one month does not a trend make so we will see over the next couple of months where things are headed. Source: Globes online June 11, 2011 Wed, 04 May 2011 10:24:43 -0500 http://www.buypropertyinisrael.com/news/concerns-persist-about-real-estate-bubble-in-israel Bank of Israel Governor Stanley Fischer met with the Knesset Finance Committee this past week and expressed his ongoing concern about Israel's real estate market.  He stressed to the Committee that Israel cannot allow what happened to countries like Spain, Ireland, the U.K. and the U.S. to happen to Israel.   Israel has thus far been able to avoid a "real estate bubble" and subsequent crash, but Fischer warned the Committee that real estate prices in Israel cannot continue their rapid rise. Fischer added, "The essential solution to Israel's housing problem is to increase supply, but the Bank of Israel can only deal with the supply side". According to the recent Monetary Policy Report released by he Bank of Israel, housing prices in Israel, which started rising in 2008, increased 16% from the first quarter of 2010 to the first quarter of 2011.  The report warns that if this trend continues, it could jeopardize the financial and real stability of Israel's economy. Both the Bank of Israel and the Israeli government have taken steps in the last 12 months to slow down the demand for Real Estate in Israel, but the government's attempts to increase the supply of apartments in Israel have not been real effective to date.  The government has tried to slow down demand by increasing the Purchase Tax on apartments purchased for Investment and the Bank Of Israel has been attempting to slow down demand by reducing the amount of money banks will loan on each transaction and by gradually increasing the interest rates.  An official from the Union Bank of Israel recently stated that they are loaning less than 60% "loan to value" on their mortgages. One of Governor Fischer's biggest concerns is that as Interest rates rise over time, more and more people who took out mortgages with variable interest rates will have problems making their mortgage payments. To address that concern, the Bank of Israel recently put a limit on the percentage of variable rate loans the Banks in Israel could make.  Although fixed rate mortgages will be slightly more expensive in the beginning, they will be less risky for the borrowers and may even prove to be cheaper over the long term, according to Supervisor of Banks, David Zaken, who was recently interviewed by Globes. According to Union Bank of Israel CEO Haim Freilichman, recently interviewed by Globes, the segment of the market that has been cooling is activities by Buyer's Groups and buyers of apartments for investment.  Freilichman says "there is no longer a stampede for every new project and if that trend continues, we could see a drop in the number of transactions and in the size of new mortgages". Source: Globes online May 4, 2011 Related article about mortgages in Israel Related article about real estate prices in israel Tue, 29 Mar 2011 17:35:03 -0500 http://www.buypropertyinisrael.com/news/mortgages-for-real-estate-in-israel-trending-up-but-not-back-to-peak The Bank of Israel released figures showing that homebuyers took out NIS 4 Billion in new Mortgages in February of this year.  That figure is 0.5% higher than in January.  Although new mortgages are now trending up, they have have fallen 16% from their peak of NIS 4.8 billion in June 2010. Part of the reason is the interest rate hikes by the Bank of Israel, as well as the new restrictions it placed on mortgages beginning in July of last year.  In July 2010, Banks began requiring 40% down payments on new mortgages, which definitely had a dampening effect on the number of mortgages taken out. The Bank of Israel says that 7,254 mortgages were taken out in February of this year, 0.5% more than in January and 15% more than in February 2010, but 165 fewer mortgages than in the peak month of June 2010. While the number of mortgages taken out has declined since June of last year, the actual size of the mortgages has increased due to the rising home prices, which began their climb in May of 2007.   Home prices have risen 16% in the past year alone and 60% since May of 2007.   Source: Globes online March 29, 2011 Have questions about obtaining a Mortgage in Israel?  Get your questions answered here. Mon, 14 Mar 2011 10:53:08 -0500 http://www.buypropertyinisrael.com/news/netanyahu-and-cabinet-intervening-to-halt-housing-shortage At the Globes Real Estate Conference last week, the major topic turned out to be the "housing shortage in Israel".   Several speakers including Nissim Bublil, President of the Association of Contractors and Builders in Israel were all very outspoken about the need to increase the number of apartments on the market in Israel.  Prime MInister Benjamin Netanyahu told "Globes" that he would be introducing a plan that would include the construction of thousands of housing units over the next 18 months.  Under Netanyahu's plan, national housing commissions will be established to bypass the bureaucracy of local and regional planning and building commissions and will concentrate all decisions as a one-stop shop.   According to many, the housing shortage stands at about 100,000 units. On Sunday, the Cabinet approved Netanyahu's emeregency plan and the Prime Minister stated that, until the legislation is approved by the Knesset, additional committees will be established alongside the existing district committees that will deal only with government plans. The goal of both the Prime Minister and Housing Minister Ariel Atias with this plan as well as all of the other recent government attempts to influence the supply of apartments, has been to provide more "affordable housing" for young couples and immigrants who have been priced out of the real estate market in Israel by a combination of local and foreign investors. Source: Globes online March 14, 2011 Related articles: Israel real estate tax law changes approved by the Knesset High real estate prices in Israel have Netanyahu's attention Tue, 08 Mar 2011 11:14:42 -0600 http://www.buypropertyinisrael.com/news/tel-aviv-keeps-on-booming Two recent articles in Israeli newspapers paint the picture of Tel Aviv's continuing growth and prosperity.  A recent article on ynetnews.com reported that the purchase of the Tel Aviv Port in north Tel Aviv by the Atarim real estate development company, has now been completed.  Atarim, has big plans for the Port.  According to the plan, the port would become the flagship tourism spot of the 'city that never stops':  Luxury hotels in the Cannes style will replace the garages and Montana ice cream, a marina will be there for docking yachts and the old Maccabiah stadium will become a family recreation center.  They will join clubs, restaurants, galleries and performance halls, a commercial center and an additional 1,000 parking spaces outside of the port area with shuttles going back and forth. A boardwalk will connect the two banks of the Yarkon River and the famous 'flying camel' statue from the historical 'Eastern Fair' of 1936 will be returned to the port's entrance. In other news, Globes reported that 2 new Hotels have been approved by the Tel Aviv Local Planning & Building Committee.  Henry Taic's 600 room Forum Palace Hotel will consist of two 17 story buildings to be constructed on Hayarkon Street by the sea.  Additionally, a 220 Room Hotel to be built on Dizengoff Street was approved.  This project is part of a conversion of the Lev Tel Aviv police station into a hotel & residential project. Source: Ynetnews.com, Globes.co.il March 8, 2011 Sat, 19 Feb 2011 19:16:44 -0600 http://www.buypropertyinisrael.com/news/israel-real-estate-tax-law-changes-approved-by-the-knesset The Knesset has formally approved several tax law changes affecting the real estate market in Israel, with the intent of cooling off the country's skyrocketing real estate prices.  The tax law changes at this point, will be for 2 years as the Government attempts to slow down Investor purchases which over the last few years have accounted for nearly a third of all real estate transactions in Israel.  The idea is to increase the supply of existing apartments and buildable land for new apartments.  The changes include the following: 1. The Purchase Tax on apartments purchased for investment, has been increased.  The new purchase tax brackets will be 5% on properties to NIS 1 million, 6% on properties costing NIS 1 to 3 million and 7% on properties costing more than NIS 3 million. 2. Reduction of  the Purchase Tax for individuals purchasing their primary residence.  The new law exempts those who buy a property up to NIS 1.35 million from paying any Purchase Tax at all.  Those who purchase in the NIS 1.35  to 1.6 million price range, will pay 3.5% and purchases over NIS 1.6 million will be taxed at 5%. 3. The Betterment Tax, which applies to the Capital gains achieved when selling a property that has appreciated, will be modified so that apartment owners who sell a property within 4 years of purchasing, will be exempt from the Tax.  Previously, an apartment owner had to wait 4 years from the time of purchase before selling, in order to be exempt from the Betterment Tax.  Also, those landowners, who sell land which they purchased prior to 2001, will pay a reduced rate of tax, 20% as opposed to 45%.  Land sold for NIS 2.2 Million or less, will be exempt from the Betterment Tax.  The Knesset also decided that these changes would not be retroactive to January 1st of 2011 contrary to what had been previously suggested. Source: Globes online February 18, 2011 Mon, 31 Jan 2011 11:15:24 -0600 http://www.buypropertyinisrael.com/news/will-real-estate-prices-in-israel-go-up-or-down-in-2011 This seems to be a question that not too many people, government agencies in Israel and or institutions can agree on. Bank Leumi has predicted that home prices in Israel, will rise by 5 to 10% in 2011.  Their basic premise is that in spite of efforts to increase the supply of apartments, the bank believes that demand will still outstrip supply in the near future.  Because Bank Leumi expects the inventory of homes for sale to remain low and interest rates to remain low as well, they are projecting the continued rise in prices, although at a much more moderate rate than the last few years. On the flip side of the coin, the Bank of Israel made statements earlier this month that they believe recent measures taken by the Israeli government, will help bring prices down somewhat.  Two of the measures they pointed to specifically were an increase of the Purchase Tax on Investors buying apartments for the next 2 years as well as an exemption on the Betterment Tax for those who own an Investment apartment that they would be willing to sell in 2011 or 2012.  The premise here is that less Investors will be in the marketplace and more Investors will sell properties they recently purchased, thus increasing supply. Bank of Jerusalem CEO Uri Paz recently stated that he believes prices will stabilize in 2011.  He points to the slight rise in interest rates that are expected this year, which will lessen the appeal of Investor purchases.  Paz stated that during the peak of the market, as much as a third of the mortgages the bank was providing were to Investors.  An article that just appeared at Jpost.com reports that according to Israel's Finance Ministry, “The weight of investors in the real-estate market increased significantly during the month of December 2010, representing close to a third of all transactions – similar to the peak level registered in the third quarter of 2009 – after almost continuously declining since the last quarter of 2009.”   The Finance Ministry suggests that the rise in Investor purchases in December was in order to avoid the new higher taxes on Investor Purchases scheduled to take effect in on the first of this month.  “Looking ahead, we expect a sharp fall in the number of purchases of apartments for investment in the first months of 2011,” the Finance Ministry said. Source: Globes online, Jpost.com January 31, 2011     Thu, 06 Jan 2011 18:41:57 -0600 http://www.buypropertyinisrael.com/news/investors-dominate-tel-aviv-apartment-purchases-in-november-2010 According to information released by Israel's Finance Ministry on Wednesday, 66% of the apartments purchased in Tel Aviv in November were for Investment purposes.  Apartment sales for the country were up 14% in November over October, led by the strong peformance in Tel Aviv and the center of the country. Although the sales countrywide were up 14%, the median home price fell 0.8% in November compared with October.  Sales of new apartments increased in Haifa, Beersheba and Tel Aviv, while in Jerusalem and the center of the country there was no significant change.  "In areas where sales by investors were stable or declined, such as Netanya or Jerusalem, there was no significant change in the number of transactions, including second-hand homes,” the report said. “This shows that... the supply in second-hand homes is influenced by the behavior of investors and less by people who want to upgrade their housing situation.” On January 11th of this year, a special 2 year exemption on capital-gains tax will go in to effect, which will hopefully have the effect of increasing the supply of apartments for sale.  Under current Israeli tax laws, apartment owners have to hold their property for 4 years before they can receive the exemption on capital-gains.  One of the other measures the Finance MInistry has taken in order to try to bring Israel real estate prices under control is to increase the Purchase Tax for the next 2 years on apartments purchased for Investment.  Both of these measures are aimed at decreasing the portion of apartments purchased for Investment.  Perhaps the new changes coming in to effect, was a big reason for the strong Investor activity in November.  Source: Jerusalem Post January 6, 2011   Fri, 17 Dec 2010 14:29:09 -0600 http://www.buypropertyinisrael.com/news/bank-leumi-believes-israel-real-estate-prices-will-rise-by-5-to-10-percent-in-2011 In a macroeconomic survey released this past week, Bank Leumi is predicting that home prices in Israel, will rise by 5 to 10% next year.  In spite of efforts to increase the supply of apartments, the bank believes that demand will still outstrip supply in the near future.  Bank Leumi says that the Israel Land Administration's (ILA) increased marketing of land for homes, combined with incentives to expand housing will boost housing starts from the current 35,000-40,000 a year to 40,000-45,000 a year in 2011-12, which the Bank feels will not be sufficient to meet demand. Because Bank Leumi expects the inventory of homes for sale to remain low and interest rates to remain low as well, they are projecting the continued rise in prices, although at a much more moderate rate than the last few years. Source: Globes online December 17, 2010   Mon, 13 Dec 2010 11:55:54 -0600 http://www.buypropertyinisrael.com/news/rise-in-building-starts-is-good-news-for-israel-real-estate-market According to figures released last week by the Central Bureau of Statistics, the first nine months of 2010 saw the start of construction of 27,780 new apartments – a 10% rise compared to the same period last year and a 4% increase compared to the last nine months of 2009. Some 66,800 apartments were in active construction at the end of September – the highest figure since the third quarter of 2002. This is the fifth quarter in a row with more than 9,000 building starts. Yossi Gordon, CEO of the Association of Contractors and Builders in Israel, said in response that the extent of building starts this year is expected to reach 37,000 new apartments. Although this is an encouraging sign, the 37,000 figure is still not enough to meet Israel's annual demand for new apartments.  A recent Bank Leumi report suggested that even 45,000 new apartments would not meet the demand in 2011-2012. Source: Ynetnews.com December 13, 2010 Sat, 11 Dec 2010 19:45:21 -0600 http://www.buypropertyinisrael.com/news/jerusalem-approves-new-apartment-project-with-affordable-housing-component The Jerusalem local planning committee approved a new Apartment project in Jerusalem this last week, that will include several units which will be offered to "first time homebuyers" at a 20% discount.  The municipality has been promising to do this, now they appear to be moving forward with the promise to include  "affordable housing" units with new Apartment projects. The Jerusalem project, planned for the Gilo neighborhood, will have 140 apartments, including 26 designated for younger people and priced at a discount of about 20%. There are several criteria for qualifying for an "affordable unit", including not having owned an apartment for the last 3 years.  The buyer or buyers in the case of a couple, will also have to agree to live in the unit for seven years.  Source: Haaretz December 11, 2010   Mon, 29 Nov 2010 09:18:58 -0600 http://www.buypropertyinisrael.com/news/apartment-sales-in-israel-jump-back-up-in-october After a 2 month decline in Apartment sales in Israel, demand for new apartments in Israel, rose 13.7% to 3,414 homes in October from 3,005 homes in September, the Central Bureau of Statistics reports. Demand in September was 5.3% lower than in August. The housing inventory fell, reaching 6.1 months of supply nationwide in October, based on the month's rate of sales. 9,687 homes were available for sale nationwide at the end of October, down 5.5% from the inventory of 10,246 homes a month earlier. The breakdown of inventory by district showed a drop in all districts, with the exception of a 10% increase in the Central District and a 1% increase in the Jerusalem District. Source: Globes online November 29, 2010 Sat, 27 Nov 2010 13:53:41 -0600 http://www.buypropertyinisrael.com/news/israel-real-estate-deals-decline-in-3rd-quarter According to a report issed by the State Revenue Administration and published by the Finance Ministry this last Tuesday, the number of real estate deals in Israel, in the third quarter of 2010 fell by 19% compared with the same period in 2009.  Approximately 23,000 housing units (new and second hand) were sold in the third quarter, the lowest number for this quarter since 2006. This double-digit decline was seen in nearly all parts of the country, both in relation to the previous quarter and in relation to the same period last year. The second quarter of 2010 also saw a decline, although a smaller one, with a 2% drop compared with the same quarter last year. The sharpest decline was noted in the Rehovot area (32%) and Netanya area (26%), which also saw significant drops in the previous quarter. Apartments purchased for Investment appear to be the segment experiencing the greatest decline in purchases, with purchases in Tel Aviv, the Sharon region and Rehovot down as much as 40%. Source: Ynetnews.com November 26, 2010   Tue, 16 Nov 2010 12:40:41 -0600 http://www.buypropertyinisrael.com/news/high-real-estate-prices-in-israel-have-netanyahu-s-attention Israeli Prime Minister Benjamin Netanyahu  is concerned enough about the high prices of real estate in Israel that he has begun a series of meetings with government officials to devise some reforms aimed at tackling the still rising real estate prices in Israel.  After meeting with the Minister of Housing and Construction Ariel Atias and Bank of Israel Governor Stanley Fischer on Monday, the first 3 steps of their future reforms were announced. Before announcing the reforms, the Prime Minister said " Over the past five years, we have witnessed a steep rise in housing prices, which is a burden on the entire population and especially on young couples.  The first step taken in building a life together is becoming harder and harder, the supply and demand issue is the main problem in the housing market.  "The short term goal of the steps we are presenting today is to alleviate the difficulties young couples meet with when attempting to purchase apartments".  The first step included in the reform is a 15% discount off the purchase of private lands in Land Administration tenders which will be offered to contractors who complete at least 80% of apartments in a given project within a 30-month time frame. The second step is the reduction of the Betterment Tax from 49% to 20%. The discount will be a one time reduction given in 2011 and on the condition that the construction will be completed within 30 months.  The Betterment Tax is imposed upon those individuals who purchased privately owned land before 2001.  The high tax is a disincentive to property owners who might otherwise consider selling their property. The third step included in the reforms is offering local authorities the opportunity to collect development taxes for public institutions and public areas directly from contractors. As of now, this obstruction makes it difficult for local authorities to issue construction permits which leads to delays in housing projects. Source: Ynetnews.com November 16, 2010 Fri, 12 Nov 2010 13:44:26 -0600 http://www.buypropertyinisrael.com/news/economist-says-israel-real-estate-prices-leveling-off Bank Leumi economist Eyal Raz has recently stated on the company blog that "we are seeing the beginning of a halt in the rise of home prices in Israel.  Raz is predicting this by looking at the available number of new apartments in Israel, which recently stood at 10,242, which is 5% more than in both August 2010 and September 2009.  Raz said Raz said "The combination of an increase in sales and inventory is seen in the stable "months of supply figure", which was 7.3. Most importantly, most of the increase in the supply of new homes, compared with August, was in the Central District, where almost 40% of the total supply of new homes is located. Raz concludes, "The rise in home prices will end. However, in order to bring about the rise in home prices to a halt, a steady increase in supply is necessary." Israel real estate market has been in a prolonged period of price increases and the entire world has taken notice.  Goverment and banking officials have been doing their best to help bring about a leveling off of prices.  Israel went largely unscathed during the global real estate meltdown, for a few reasons including higher down payment requirements.  According to a recent statement made by Stanley Fischer, Governor of the Bank of Israel, one of the reasons the demand for apartments has remained high is due to the greater proportion of parents in Israel, compared to other countries, who help their children buy their first apartment.Source: Globes online November 12, 2010 Wed, 03 Nov 2010 11:31:00 -0500 http://www.buypropertyinisrael.com/news/trend-in-tel-aviv-toward-smaller-apartments Unlike many other parts of the country, real estate developers in Tel Aviv have been building smaller apartments to meet demand from "younger clientele" who are willing to live in smaller, well designed spaces in order to be close to everything in the city.  Apartments with one or two bedrooms are making a comeback, according to Ronny Cohen, the deputy managing director of Eldar Projects Marketing. Ronny said, “Small apartments have become more desirable due to the rise in prices, even if the unit is smaller by only a few square meters.” There are now several Projects in the city with apartments in the 60 to 90 sq meter size range and some even smaller.  At the same time, the Tel Aviv District Planning and Building Committee has begun to implement a requirement that at least 20% of new construction go toward small apartments Read in depth article at Haaretz November 3, 2010 Thu, 28 Oct 2010 11:32:57 -0500 http://www.buypropertyinisrael.com/news/bayit-vegan-to-get-175-new-apartments Elad Israel Residence Ltd. has received approval to build a 175 unit apartment in the Bayit Vegan neighborhood of Jerusalem.  The company will begin construction of the 55 apartments in the first phase of the company, 30 of which have already been sold. The 175 apartments will be in three buildings.   Prices begin at NIS 1.74 million for an 81-square meter three-room apartment, to NIS 2.5 million for a 111-square meter four-room apartment, and NIS 2.92 million for a 134-square meter five-room apartment. Source: Globes online October 28, 2010