BPII News RSS Feed http://www.buypropertyinisrael.com/ KohanaPHP Fri, 28 Apr 2017 14:44:51 +0000 http://www.buypropertyinisrael.com/news/israel-to-build-10-000-new-homes-in-new-jerusalem-neighborhood Israel to build 10,000 new homes in new Jerusalem neighborhood Israel's Housing Ministry has reintroduced a plan to build 10,000 homes in the abandoned Atarot Airport property.  The plan which was established several years ago, was frozend due to the Obama administration's policies about new construction beyond the 1967 lines.  The project is intended to be an ultra-orthodox neighborhood, although there is concern Haredi leaders about the close proximity of the proposed development to Palestinian populations. Source:jns.org Thu, 27 Apr 2017 15:37:11 +0000 http://www.buypropertyinisrael.com/news/master-plan-approved-for-eilat-means-big-expansion Master Plan approved for Eilat means big expansion A significant new Master Plan for the City of Eilat.  The Plan calls for construction of 14,300 homes and 5,400 hotel rooms.  A collaboration of Planning Committees, an inter-ministerial steering committee and the local municipality devised the plan.  An important part of the plan is strengthening tourism in the city and preserving nature and the unique landscape.  The plan encompasses infrastructure on a national scale, including border crossings, the port, a military base, an airport. a railway and industrial facilities. Read entire article Thu, 19 Jan 2017 15:03:11 +0000 http://www.buypropertyinisrael.com/news/buy-property-in-israel-and-currencytransfer-com-establish-relationship Buy Property In Israel and CurrencyTransfer.com establish relationship Buy Property In Israel and CurrencyTransfer.com, a Foreign Currency Exchange Firm with offices in London and Tel Aviv have established a working relationship to help clients save money on their Foreign Currency Transfers.  CT currently supports more than 25 currencies.  Their secure currency marketplace promises to offer better than bank exchange rates.  Sign up for Free or just learn more. Recent interview witth BPII Founder given to CT Sat, 14 Jan 2017 16:03:44 +0000 http://www.buypropertyinisrael.com/news/reasons-the-israel-real-estate-market-has-cooled-off Reasons the Israel Real Estate Market has cooled off Recent reports from both the Central Bureau of Staistics and the Israel's Finance Ministry show that the residential property market in Israel has cooled off in 2016.  Purchases by both foreign residents and local investors are down over the last 12 months.  The Finance Ministry noted that purchases by Investors is at it's lowest level in years.  Many prople speculate that this decline is primarily due to the Governments latest tax increases on multiple ownership of residential properties.  The decline in purchases by foreign residents could be partially attributed to the uncertain political climate during 2016 in the US, but the higher Purchase Tax on apartment purchases probably also contributed to the slow down. Globes Article with Central Bureau of Staistics stats Globes Article with Finance Ministry stats Purchase Tax rates until January 15th, 2017 Sun, 08 Jan 2017 16:53:02 +0000 http://www.buypropertyinisrael.com/news/new-mixed-use-project-approved-for-katamon-neighborhood-of-jerusalem New mixed use Project approved for Katamon neighborhood of Jerusalem The Jerusalem District Planning and Building Commission has approved a new mixed-use Project covering nearly 6 acres of land in the Katamon neighborhood of Jerusalem.  The plan calls for 316 housing units in 6 high rise buildings with commercial and office space on the ground floors.  25% of the residential units will be small apartments.  The new project will be located on the axis of Ben Zakai Street, Maalei Zeev Street, and Ben Baba Street. Jerusalem District planner Shira Talmi said, "The additional housing units are important for Jerusalem. The plan greatly improves the public space in the neighborhood, contributes a lot to development of the connection between the bordering neighborhoods, and increases the supply of open public space in the area." Source: Globes Sun, 01 Jan 2017 16:37:23 +0000 http://www.buypropertyinisrael.com/news/tel-aviv-becoming-israel-s-new-aliyah-capital Tel Aviv becoming Israel's new Aliyah capital In 2016, Tel Aviv outpaced Jerusalem as the "destination city" of the greatest number of new immigrants.  The majority of those making Aliyah and choosing Tel Aviv, did so because of the "start up" environment and the cosmopolitan lifestyle.  With immigration from countries where Jews were suffering persecution declining in 2016, the more predominant number of immigrants came from Western Europe and North America. 27,000 people made Aliyah in 2016! Source: The Times of Israel Tue, 20 Dec 2016 00:22:28 +0000 http://www.buypropertyinisrael.com/news/foreign-residents-may-enjoy-some-tax-benefits-for-buying-a-property-in-judea-or-samaria Foreign residents may enjoy some tax benefits for buying a property in Judea or Samaria Foreign residents who buy property in Judea or Samaria may be exempt from paying certain Israeli taxes.  Foreign residents, who are not Israeli citizens are exempted from paying taxes such as Capital Gain Tax and Property Tax, when they buy a property outside of the "green line".  Foreign citizens could also be exempt from Israel Income Tax from rental income on investment property purchased in Judea or Samaria.  This tax advantage for foreign residents certainly provides incentive to buy in the communities of Judea and Samaria.  Source: Epstein & Co. Law Offices in Jerusalem Mon, 19 Dec 2016 23:49:00 +0000 http://www.buypropertyinisrael.com/news/city-of-tel-aviv-approves-master-plan City of Tel Aviv approves Master Plan The City of Tel Aviv approved their first-ever Master Plan, which will accomodate 120,000 new homes and 5 million square meters of office space.  The Plan, called TA-5000, sets the direction for the city's development through the year 2025.  Much of the new space will be along the Ayalon highway and the railway line. Source: Globes Mon, 11 Feb 2013 21:02:53 +0000 http://www.buypropertyinisrael.com/news/ashkelon-one-of-israels-best-kept-secrets Ashkelon - One of Israel's best kept secrets By Michelle Cohen - Ashkelon, January, 20th 2013 One of Israel's best kept secrets is a small city on the coast of the Mediterranean Sea, where the sun shines almost every day of the year, where the climate is mild and tempered, and where the beaches are vast and bountiful. With wave-breakers, the sea is pleasant and safe for children as well as adults. The city offers a lovely little marina, with restaurants overlooking the docked boats, and a beautiful walk along the sea—complete with free outdoor exercise centers  There are two shopping malls and a downtown area where one can spend the entire day visiting from store to store. Cafés are abundant, where people meet and socialize  With about 120,000 residents, it is a city with a steady speed, where one can enjoy a calm pace of life. Combined with historical sites and archaeological findings, this city was once the ancient vacation resort of Roman aristocracy. Spending the day at the national park will lure one's imagination and peak one's curiosity. The park is vast and suited for picnicking, gatherings or just a stroll-through, whilst taking in the remains of ancient civilizations  The historical sites are so significant that Harvard University operates an archaeological summer school program. With new and beautiful apartment complexes and privately built homes, the city is beautiful and has innovative and creative architecture. It is growing at a good pace, and is home to immigrants from almost every corner of the globe. This city is beautiful and well planned, with expansions that allow for space and practicality. There are both English and French speaking associations for those who have recently arrived and have not yet learned Hebrew. These associations offer a wide range of activities. Centrally located, it is easy and fast to drive to Tel Aviv, Jerusalem or Be'er Sheva; public transportation is readily available. The city has nineteen elementary schools, nine junior high and high schools. An academic college hosts thousands of students. There is also a sports arena and there are international film and music festivals each year. There is a medical center and many healthcare facilities. The northern terminus for the Trans-Israel pipeline, which brings petroleum products from Eilat to an oil terminal at the port is located in this city, and so is the seawater reverse osmosis (SWRO) desalination plant, which is the largest in the world. Since 1992, Israel Beer Breweries has been operating in the city, brewing Carlsberg and Tuborg beer for the Israeli market. Intel is located not far from this city, and there are job opportunities for skilled workers. Life is enjoyable in this city because of the low stress volume and the high quality of life. So what is the name of this precious little city that has been kept a secret? It is called Ashkelon, and it will not be a secret for very much longer.Michelle Cohen, a gifted writer operates a Blog with Daily News, Videos, Analysis and Opinion. Visit Israeli Frontline and check it out.     Wed, 14 Nov 2012 17:40:04 +0000 http://www.buypropertyinisrael.com/news/new-lending-restrictions-hit-israeli-mortgage-market New lending restrictions hit Israeli Mortgage market Mortgage Finance for Investment Properties capped at 50% By Aaron Krasner Bank of Israel governor Stanley Fisher has taken careful aim at a resurgent real estate market, issuing severe lending restrictions effective as of November 1st. As with previous directives, Fisher is walking a tightrope, seeking to cool the market without inadvertently bringing about the collapse he so desperately seeks to avoid. First time Israeli buyers remain largely unaffected with lending capped at 70-75%, but lending for ‘investment properties’ has been dramatically cut back to a maximum of 50%. A second property is automatically considered an investment, and surprisingly - indeed unfairly - all foreign residents have been defined as investors. This latest directive is part of a larger trend of targeted restrictions which aim specifically at problematic market segments. In May 2010, Fisher insisted on higher capital provisions for all loans above 60%, making loans more expensive for those seeking the highest available level of mortgage finance. In April 2011, Fisher limited variable-rate mortgages to one-third the value of the total loan, attempting to stop borrowers from being lured into mortgages with a low initial repayments.  Such loans can quickly become unmanageable when interest rates return to normal levels. This new directive seeks to impede ‘investors’, a demographic more likely to overreach than the average homeowner, and which claims no political entitlement to affordable housing. Unfortunately, every war has collateral damage. Whilst Fisher has correctly identified foreign speculators as a potential trojan horse, many foreign residents have made Israel their home. Such buyers are usually wealthier than the average Israeli, yet their dream of buying in Israel has been tied up in Fisher’s red tape. Parents buying apartments for their young married children will also be hit hard. They will now need a cash down payment of 50%, and will have a much harder time mortgaging their existing homes to help finance the purchase. This is especially true of Chareidi families, who often have large families, small down payments, and social pressure to provide apartments for their married children.   Fisher may be correct as to the risk inherent in this group. But considering that a mortgage repayment is often less expensive than rent, Fisher has now made it harder for many young couples to build equity and long-term financial security. Only time will tell whether the lender’s will apply the new directives on a case-by-case basis, or whether they will blindly enforce them across the board. If previous experience is anything to go by, it will not be long before both borrowers and lenders find the requisite loopholes to blunt Fisher’s restrictions. The Bank of Israel’s new directives were announced together with a surprise 0.25% interest rate cut, caused by the deteriorating macro-economic situation at home and abroad. Ultimately, the allure of cheap credit may be too much to keep buyers away. With a growing population and a government continuing to restrict the supply of land, the fundamentals continue to point towards slow but steady price increases. If you are sitting on the fence waiting to see how prices move, don’t be surprised if Fisher’s latest measure is not a game changer. If you appear to be hit by the new restrictions, speak to someone who may be able to advise you how to limit their impact. At some future point, Fisher may lose patience with targeted restriction and issue an unqualified directive limiting all mortgages to 50% finance. Many are speculating that a 50% mortgage cap for apartments priced above 1.5m nis will not be long in coming. For the time being, Fisher - and the entire industry - continue to walk the tightrope. Aaron Krasner is a mortgage broker at Mortgage Israel and can be reached at  aaronkrasner@mortgageisrael.com . November 14, 2012   Sat, 08 Sep 2012 18:15:58 +0000 http://www.buypropertyinisrael.com/news/jerusalem-5800-initiative-takes-step-forward Jerusalem 5800 initiative takes step forward An extremely ambitious private initiative deemed Jerusalem 5800, which has been 2 years in the planning, took a step forward recently in it's plan to bring over 200 new Hotels to Jerusalem between now and the Jewish Year 5800.  The initiative, headed up by Australian Hi-Tech Investor Kevin Bermeister purchased a 185 Room Hotel at the entrance to Jerusalem for $17.5 Million.  The purchase of the Leonardo Hotel, in one of the areas of the city designated for new Hotel development will give the group the opportunity to increase the density of the building and perhaps the density of the property, enabling an increased return to the Investors. The Vision of Jerusalem 5800 is to increase the average annual Tourism to Jerusalem from it's current 2 to 3 million per year to 10 to 12 million per year over the next 28 years.  Bermeister has assembled an impressive array of activists, architects, engineers and environmental and demographics experts to assist in the effort.  In addition to bringing new hotels to Jerusalem, the Jerusalem 5800 plan calls for a ring of parks and green corridors, scattered throughout the city.  Bermeister says "The green space will enable walking tours, bicycles, and personal electrical means of transportation, and allow easy access to Jerusalem's centers of culture, tourism, conventions and other events and attractions". The plan even envisions underground traffic systems and an International Airport.   Bermeister also sees a vast increase in companies establishing a business presence in Jerusalem, helping to lift the city out of some of the poverty that has enveloped it in the past. Find out more about the Jerusalem 5800 plan. By Lyle Plocher September 8, 2012   Wed, 27 Jun 2012 01:03:52 +0000 http://www.buypropertyinisrael.com/news/israel-real-estate-market-awakening-from-it-s-slumber Israel Real Estate market awakening from it's slumber It appears that the Israel Real Estate market is starting to awaken from it's more than a year long hibernation.   According to a recent Globes article, the amount of new mortgages taken out in May of this year was up 37% from April and up 21% over the average mortgages taken out per month this year.  Perhaps Buyers have decided that the prices are not going to come down much more than they have and consequently are re-entering the market.  The Finance Ministry reported recently that 1st Quarter home sales were up about 20% from the previous quarter.  The buyers re-entering the market seem to be led by young couples according to a few different sources.  Perhaps it's harder for them to continue waiting as opposed to overseas buyers purchasing a second home, which is a much more discretionary transaction. The slight decrease in real estate prices over the last year has provided some temporary relief to Israelis.  According to information released in June by the Housing and Construction Ministry, the number of paychecks the average Israeli needs to buy a home fell to 127 in the first quarter from 134 a year earlier. By Lyle Plocher June 26, 2012   Sun, 01 Apr 2012 23:55:04 +0000 http://www.buypropertyinisrael.com/news/knesset-approves-housing-reform-measures 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 16:28:11 +0000 http://www.buypropertyinisrael.com/news/israel-bank-officials-concur-no-drastic-declines-in-real-estate-prices-for-2012 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 18:44:58 +0000 http://www.buypropertyinisrael.com/news/billionaires-seem-to-like-israel 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 18:08:51 +0000 http://www.buypropertyinisrael.com/news/what-s-really-happening-in-the-israel-real-estate-market 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 10:21:25 +0000 http://www.buypropertyinisrael.com/news/israel-real-estate-market-quiet-but-prices-have-not-dropped-dramatically 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 10:11:43 +0000 http://www.buypropertyinisrael.com/news/are-israel-real-estate-prices-on-the-decline 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 16:02:42 +0000 http://www.buypropertyinisrael.com/news/now-may-be-the-time-to-buy-that-apartment-in-israel 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 19:18:36 +0000 http://www.buypropertyinisrael.com/news/recent-mortgage-changes-in-israel-have-little-effect Recent mortgage changes in Israel have little immediate 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 20:33:56 +0000 http://www.buypropertyinisrael.com/news/is-the-israel-real-estate-market-finally-cooling-off 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 15:24:43 +0000 http://www.buypropertyinisrael.com/news/concerns-persist-about-real-estate-bubble-in-israel 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 22:35:03 +0000 http://www.buypropertyinisrael.com/news/mortgages-for-real-estate-in-israel-trending-up-but-not-back-to-peak 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 15:53:08 +0000 http://www.buypropertyinisrael.com/news/netanyahu-and-cabinet-intervening-to-halt-housing-shortage 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 17:14:42 +0000 http://www.buypropertyinisrael.com/news/tel-aviv-keeps-on-booming 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