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THE LATEST NEWS FOR THE REAL ESTATE MARKET

The Central Bureau of Statistics also published the Housing Price Index today for April – May.
Globes July 17, 2019 

The Index showed the price of the average deal rising 0.5% in April-May compared with March-April. Housing prices have risen 1.6% over the past 12 months.
Inflation in Israel was only 0.8% over the past 12 months, the Central Bureau of Statistics reports, decreasing the likelihood of a rate hike.
The Consumer Price Index (CPI) unexpectedly fell 0.6% in June, the Central Bureau of Statistics reported this evening, a much bigger fall than analysts’ predictions, who had expected a 0.2% to 0.4% fall. The CPI has risen 0.8% in the past 12 months, below the Bank of Israel’s annual target range for inflation between 1% and 3%, making an interest rate hike this quarter, as forecast by the Bank of Israel Research Department, much less likely. This follows a 0.7% rise in the CPI in May.
Notable price falls in December included fresh fruit and vegetables (11%), clothing and footwear (6.2%) and furniture and household equipment (0.6%).

The Basel area is going to pick up even higher value.
The winning consortium of White City Buildings, the JTLV group, and Isrotel will build apartments and hotels.

Globes July 17, 2019 
When the envelopes were opened today, a consortium of White City Buildings, the JTLV group, and Isrotel was declared the winner of the Tel Aviv municipality’s tender for selling the land on the Magen David Adom site in Basel Square in Tel Aviv. The winning bid was NIS 261 million. The plan includes demolishing the existing building and construction of 30 apartments averaging 200 square meters each on the three-dunam (0.75-acre) site. The project also contains hotels and health and spa facilities, such as a swimming pool, a fitness room, concierge services, and special commercial areas for the hotel guests and tenants on the site.
Investors in the joint fund, which raised NIS 750 million in the initial closure, include Bank Hapoalim, Clal Insurance, and Meitav Dash Investments.
Isrotel will provide management services for the site, making the services and conditions provide by the hotels to their guests also available to the tenants on the site.
Shoham said, “It is a great privilege for White City Buildings to continue leading innovation in Tel Aviv. The boutique project on the Basel site will create an innovative mixture of uses, including a hotel and excellent residences. The successful cooperation with Isrotel and our connection to the city and its values will help us build one of the most important compounds ever constructed in Tel Aviv.”
Isrotel CEO Lior Raviv said, “This is another important step in our entry into the urban hotel business in Tel Aviv. The location is unique, and the combination of a hotel on the highest level and luxury dwellings is perfect. Our goal is to continue consolidating our position in the hotel industry in Tel Aviv, and the hotel on Basel is another step in this direction.”

New-minted transport minister Smotrich: Sde Dov will not close
Globes June 18,2019

Betzalel Smotrich’s first stop after being appointed minister of transport was the tent protest against the closure of Sde Dov Airport led by Eilat mayor Moshe Yitzhak-Halevi.
Within an hour of being appointed minister of transport, MK Betzalel Smotrich turned up at the protest tent set up by Eilat mayor Moshe Yitzhak-Halevi opposite the Ministry of Finance in Jerusalem. Yitzhak-Halevi is protesting against the closure of Sde Dov Airport in Tel Aviv, which is scheduled to take place at the end of this month to make way for residential construction, claiming that the closure will drastically impair travel between the center of the country and Israel’s southernmost city.
Smotrich, an enthusiastic supporter of the protest against the airport closure, said yesterday: “Sde Dov must not be closed, and with God’s help Sde Dov will not be closed. This is the first matter I discussed with the prime minister in this very place in his bureau, a moment after this appointment was agreed. Under the wise leadership of the mayor of Eilat, a move is underway that is certainly a mission possible.
“It is very symbolic that my first working meeting in this role is taking place here in this tent in a campaign we have been leading together for several years. Wearing the transport minister’s hat the authority is not in my hands but the responsibility is certainly even more on my shoulders. We will go into this at full power. It’s a just, right, moral and Zionist struggle of the first order. When you conduct a just campaign, you generally succeed. It requires a great deal of determination, and I believe that if we join forces we will succeed in this challenge as well.”

Amiram Barkat – Globes May 15,2019 

CPI up 0.3% in April, housing prices up 0.1%
Inflation was 1.3% in the past 12 months, while due to the latest rise housing prices rose 0.5% in the past 12 months,
The Consumer Price Index (CPI) rose 0.3% in April, the Central Bureau of Statistics reported this evening, lower than expected. The CPI has risen 1.3% in the past 12 months, still towards the lower end of the Bank of Israel’s annual target range for inflation of between 1% and 3%. The CPI has risen 0.8% in the first four months of 2019. This was the third successive month in which the CPI has risen after three successive months before that when it fell.
Prominent price rises in April included footwear (2.4%), fresh fruit (1.5%), transport (1.5%) and culture and entertainment (0.5%).
The Central Bureau of Statistics also published the Housing Price Index today for February-March 2019. The Index showed the price of the average deal rising 0.1% in February-March compared with January-February. Housing prices have risen 0.5% over the past 12 months.
Israel’s Central Bureau of Statistics reports.

 

Arik Mirovsky in Globes May 14,2019
Neve Tzedek lot sold for NIS 17.6m
The Tel Aviv lot is zoned for construction of a building with 10 apartments and a commercial façade.
Dan Real Estate has won an Israel Land Authority auction for the purchase of a 255-square meter lot in the Neve Tzedek neighborhood of Tel Aviv. The lot, located at the intersection of Elhanan Street and Degania Street, is zoned for construction of a building with 10 apartments and a commercial façade. The company will pay NIS 17.6 million for the lot.
A plan called Tafri Neve Tzedek East applies to the lot. The plan, which was approved in January 2018, includes the northeastern part of the neighborhood bordered by Elhanan Street, Talmi Street, and the edge of Rothschild Boulevard. The plan, which covers 35 dunam (8.75 acres), is designed to preserve the neighborhood’s historical construction fabric, which features low construction and a high land cover (buildings that occupy a large proportion of the lot on which they are constructed).
The plan applying to the lot that was sold stipulates a 15-meter high, three-storey building with a commercial façade. The average space of the apartments will be at least 65 square meters. The minimum price in the auction was NIS 5.44 million, and 14 bids were submitted.

Gili Melinsky , May 7, 2019 , The Marker, interview of Oded Gvuli
« Tel Aviv has no competition ! Housing prices will only increase says Oded Gvuli, ex-engineer at the City of Tel Aviv Jaffa. He is convinced that the Israel Land Authority disappear and let the Mayors handle the distribution of land and on the way eliminate two thirds of the municipal authorities. Decisions for Planning and Housing should be made by professionals and not by politicians who typically  only worry about their next job.”
Oded Gvuli left the Building of the Planning Authority at City of Tel Aviv for the last time and left the title to the new heir, Udi Carmeli. After 11 years on the job, 7 of which as City Engineer, he will, from now on, look at the private sector.
Management at the City planning department ended as a total failure as far as creating a long term strategy. Part of it is  because, during too many years, all the decisions for housing strategies were left to the Ministry of Finance with at its head, Moshe Kahlon. The Israel Land Authority and the planning were, as well, left to the Ministry of Finance.
Why didn’t they consolidate Bat Yam and Tel Aviv? I believe this is one mistake of my time on the job. We could have been a beacon for the other cities. We  had  a social , economical and financial study ready and we were almost there, but politics killed it all. Israel should have 60 Municipalities instead of 255 and then in this way develop on their own an independent economy with low price housing and a lower cost of living. In Tel Aviv EVERYTHING is more expensive!
So is the city ready to let go of the young and the poor and leave Tel Aviv to the rich only?Absolutely not. Tel Aviv is very sensitive on that point and does not want this to happen. But in the meantime, there is no chance to see prices of real estate coming down. Tel Aviv has no competition and prices WILL go up. As long as the city is more attractive the price of land will go up. A liberal, secular, european feel  city in Israel today is a city where everything is expensive.
On April 19, 2019 Adar Horesh in The Marker
Is this how any given balloon ends? Price of homes are going up in areas where most of Israelis want to live.
The index of prices that was published this week by the Central Bureau of Statistics totally wiped out the annual decrease reported lately. Based on data from The Marker and Yad2 the prices for the areas in high demand are rising.
The data published by the Central Bureau of Statistics shows that the program put together by the Minister of Finance, in order to bring prices of homes down, lost terrain. The prices are trending up. The high demand in the Center of Israel area and the low inventory is driving the market up.
The numbers are also showing that the buyers and investors who were on the fence are now getting back to purchasing. The efforts to shorten the wait for planning and permits for the builders failed and the pace of starts of building is still slow. Everybody in the industry is warning about a shortage of inventory and a renewal of the uptrend  in prices.
From the Index Data we can see that the prices for the homes for sale went up significantly compared to the month before.
The prices for apartments for rent was stable, but this trend is normal for the winter months considered “slow months” for rentals.
Here is a graph showing  the asking prices for 4 room homes – in Yad2, comparing  selling Prices in February and March 2019
Also a graph with prices for 3 room rentals March 2018 compared to March 2019
But these numbers don’t necessarily forecast increased prices for the months to come. The Market is influenced by the expectations of the buyers and the sellers; as well the programs the new government might put out would really influence the mood of the players in the Market.

On April 23, Arik Mirowsky in Globes is saying :
Increasing housing supply in low demand locations won’t cut prices when there is a shortage of housing in Tel Aviv and Jerusalem.

The Israel Builders Association has begun a campaign in recent days, including a lecture by Prof. Shmuel Hauser, arguing that if the supply of housing increases, prices will fall.

This campaign relies on the obsessive counting of housing units begun at the beginning of the decade, when housing prices began to rise. This obsession caused damage, a small part of which began to surface recently, but most of which will appear in the coming decades.

The government enthusiastically jumped on the housing shortage bandwagon in order to demonstrate that it was doing something to lower housing prices. Economists also endorsed this thesis, because it was simple and fitted in with simplistic economic models.

In recent years, the overall supply of housing increased, especially in 2013-2015, through accelerated construction, but prices did not fall and the public was in no hurry to buy the new apartments. Spacious apartments built to a high standard in new neighborhoods stayed on the shelf, and not only because the prices were still high. Why? Because the apartments were not built where they were needed. The supply problem in Israel is not universal; it is in special places and specific sectors.

There is no lack of housing in the Krayot region north of Haifa, or in Harish (actually, the secular population did not need Harish), or in Dimona, Beer Sheva, or Akko. There is a shortage of housing in Tel Aviv and Jerusalem, in haredi (Jewish ultra-Orthodox) communities, and in Arab communities. These are exactly the places where not enough housing was built.

Most of the activity aimed at increasing the supply of housing created a phony supply of housing of no relevance to the country, to no one’s benefit in the near future. On the other hand, demand pressure in the places that are relevant will continue. We will pay the price of the unneeded supply and the missing supply in the next housing crisis.

Shlomit Tsur 3 April 2019 Globes
Sde Dov Airport is slated to halt operations in November 2019 despite a public campaign against the closure led by the Tel Aviv and Eilat mayors.
The Tel Aviv District Planning and Building Commission in the Planning Authority today deposited for public objections the plan for a Sde Dov residential neighborhood in place of Sde Dov Airport in north Tel Aviv. The plan applies to 2,500 dunam (625 acres), The site is bordered by the Reading power station on the south, land in northwest Tel Aviv on the north, and the Nofei Yam and Lamed neighborhoods on the east.
Under the deposited plan, 16,000 housing units will be built on the site, including
6,900 rental apartments at reduced rents, assisted living facilities, and student apartments. The plan also includes
514,000 square meters of public buildings,
126,000 square meters of commercial space,
323,000 square meters of office space,
200,000 square meters of hotel space,
3,700 hotel rooms, and
385 dunam (96.25 acres) of public parks and gardens.
The proposed construction includes 5-10-floor buildings along the main streets and 35 towers of up to 40 floors along the main arteries in the site.
Sde Dov was founded as a civilian airport in 1938 north of Tel Aviv, near the Reading area. Part of it later became a military airport, and the area now contains a military base and a civilian terminal.
The government reaffirmed the Sde Dov law in June 2018 and decided that the military airport would be vacated by July 2019 and the civilian airport by November 2019.

On April 1 2019 Arik Mirowsky in Globes is writing
The difference in housing prices between Tel Aviv and the rest of the country has risen from 56%, 30 years ago to 120% now, according to the Central Bureau of Statistics.
The phrase “the state of Tel Aviv” refers to many things. In real estate, it refers mainly to the growing difference in housing prices between Tel Aviv and the rest of the country, especially the outlying areas. 30 years ago, average housing prices in Tel Aviv were 56% higher than in the rest of Israel. Today, the difference is 120%, according to the Central Bureau of Statistics.
The surge in real estate prices hit the outlying areas in 2009, while the government began to act, or at least to say that it was acting, to lower prices. Former Ministers of Finance Yuval Steinitz and Yair Lapid failed, while current Minister of Finance Moshe Kahlon only managed to halt the upward price spiral. Real estate prices in Tel Aviv now average NIS 2.7 million: 1.5 times the average in Jerusalem, 2.5 times the average in Haifa, and triple the average in the outlying areas in northern and southern Israel.
The state of Tel Aviv has completed its real estate triumph.

 

On January 27 2019 Shlomit Tsur and Arik Mirovsky in Globes are giving us the details of a few apartments sales that closed in Tel Aviv :
A 130 m2 – 4 rooms – 4th floor (with elevator) on Heh B’Iyar (Kikar Hamedina – New North) sold for 4.8M NIS – This price is certainly for a property needing all new remodeling and that could sell once redone for 6.5M or more.

A 80m2 – 3 rooms – 2nd floor (no elevator) – Hahalutzim St (Florentin) sold for 2.56 M NIS. Absolutely within the price range in the neighborhood.

A 153 m2 – 5 rooms- 42nd floor (tower building) in Park Zameret sold for 6.52 M NIS. Confirming the trend of lower cost at buying but very high maintenance fees.

A 73 m2 – 3 rooms – 2nd floor (no elevator) on Bilu street (Heart of the City neighborhood) – Steps from Habima square sold for 3.07M NIS.
These prices just confirm that the market is steady certainly not coming down

Leumi: Housing Prices in Jerusalem and Tel Aviv to rise.
However, prices are likely to fall in southern Israel and Haifa: Bank Leumi Economists predict

Arik Mirovsky – Globes – Feb 7,2019

Housing prices will not fall substantially in the near future, and may very well rise in high-demand areas like Tel Aviv and Jerusalem. Prices are likely to fall in the southern and Haifa districts, where substantial excess supply has accumulated in recent years, according to a residential real estate survey by Bank Leumi (TASE: LUMI) chief economist Dr. Gil Bufman and analyst Alon Kreis.
The long-term rise in housing prices in Israel came to a halt over the past year. As of November 2018, the Central Bureau of Statistics’ general housing prices index was down 2.3% from its level from a year before.
The number of homes built in recent years was relatively large, but Bank Leumi’s economists examine whether the homes correspond to the level of demand in different regions. Their conclusion is similar to previous studies in the sector. In Jerusalem and Tel Aviv, there is major demand pressure, meaning that the supply does not meet the demand for homes. The situation in the central district is more balanced, with a tendency towards demand pressure. The situation in the northern district is evenly balanced between supply and demand, while excess supply has accumulated in the Haifa and southern districts, because construction there is higher than housing needs.
The economists make a distinction between “the Buyer Fixed Price Plan market, in which growth is rapid, with most of the housing starts and deals taking place in it, and the free market, in which the volume of sales is in a prolonged decline, combined with a drop in housing starts.” In the second half of 2018, the number of new homes purchased rose again, following an increase in purchases in the Buyer Fixed Price Plan framework. On the other hand, the weight of move-up buyers and investors in the market is falling. The survey states that the reduced weight of these two segments in the housing market accounted for the fact that the steepest falls in prices over the past year were in the Jerusalem and Tel Aviv districts. Demand in these two districts is very dependent on wealthy investors, who vanished from the market, causing a sharp drop in demand for housing.
“Looking ahead, the stabilizing trend in housing prices, or at most a moderate decrease, is likely to continue, with support from housing completions. This is likely to remain at the minimum level necessary to fulfill Israel’s regular housing requirements, 50,000 homes a year, for the next year or two, or slightly beyond that. At the same time, the housing price trend in the medium term will depend on government’s housing policy and the macroeconomic environment,” the Bank Leumi analysts conclude. They predict that prices will behave differently according to district, meaning that prices will fall in Haifa and the south and rise in Tel Aviv and Jerusalem.


The Electric Company of Israel is releasing land in Tel Aviv
750 apartments will be built in Ramat Ahayal in the framework of the “lottery” for young couples
Yael Darel – The Marker – Feb 5, 2109

This project of building 750 apartments in this program is part of a signed agreement between The Electric Company and the Israeli Land Authority
This agreement includes 16 sites in great locations including around Reading. As per the agreement they have been already released to the government in October 2018
The Israeli Land Authority is saying that this project will allow the connecting of areas which are presently disconnected by the Electric Company Compound. This will allow an open flow North-South which will benefit Tel Aviv and the whole region
The value of this land as off today is abou 1.7 Billions Shekels and the symbolic agreement was signed today between : the Ministry of Finance – Moshe Kahlon – , the President of the Electric Company Iftah Ron Tal -, The City Manager – Adiel Shamron-, and the Head of the Israeli Land Authority – Menahem Liebe


Even with the property tax (Arnona) doubled, nothing is going to change : Tel Aviv is on its way to become like Eilat.
Meirav Moran – The Marker Jan 28, 2019

Tel Aviv City Hall decided yesterday that the owners of apartments declaring that they use their properties like a hotel, will have to pay a tax of 120 NIS per square meter/per year. This is for this tax an increase of that would vary from to 3 to 4 times as much as it used to be
It sounds like a lot but in fact, it represent an increase of just a few hundred NIS per month per apartments. This change will not scare away the owners who rent out their properties between 500 and 3000 NIS per night
And for those that use a few apartments to run such a business, it will not count much taking into account that their turnover represents thousands of NIS per month. On top of it, the neighbors at this point cannot go and complain at the City for the nuisance due to such a business. The City is now being paid and cannot forbid it.
This law is very convenient for the owners who until now were not “legitimate”, they can from now on run their business legally and rent their apartments thru Airbnb
With this legalization , Tel Aviv who offers a nice and comfortable lifestyle is now becoming like Eilat with a majority of its residents being tourists along with restaurants and hotels.
Good Luck

AIRBNB is growing on Steroids” spread all over Tel Aviv and makes prices of properties go up.
Gili Malinsky – The Marker Economics News  – Jan 18,2019
What started as an alternative that would attract tourists, became this last year a huge phenomena in Tel Aviv. Tel Aviv surpassed Amsterdam and even Barcelona. And this industry impacted the local rental market
The City in a very short message, this week, announced that there will be a change in the property tax for people who rent their apartments. In fact this is a war against Airbnb. The City announced that whoever rents his apartment on the Airbnb platform or any other platform, for more than 90 days per year, will stop being taxed at a residential tariff but at least 3 times as much just like for 4 or 5 stars hotels.
This decision came after residents complaining about their neighborhoods being invaded by tourists that changed the essence of their streets. Especially when we speak with young families who are trying to find apartments for rent and look for months before finding one.
More and more apartments are being rented on Airbnb these last two years as if “on Steroids”. The City is saying that Tel Aviv needs such an option but we have to find a balance to please everybody.

It is not just « an impression » a Study was made by the City Halls of touristic cities with the Socio economic center of Study, and it shows that if we compare: we have in Tel Aviv 1 apartment on 25 rented to tourists, in Amsterdam 1 on 45 and in Barcelona 1 on 78
As per the City this is a very lucrative business : the average price (3 rooms) is 186$ per night and could run up to 8500$ for luxury apartments in the Towers.
As per Bloomberg study on tourism in 2018, Tel Aviv is number 4 for the most expensive city. This would explain why the owners discovered a new and huge appetite for Airbnb
In Tel Aviv 7% of the tenants represent 41,5% of the apartments on Airbnb. In fact, 191 renters count for the 3000 apartments presented on Airbnb

Dec 30, 2018  The Marker _ Yael Darel
Des tours à Kikar Hamedina : après 20ans de discussions finalement Les tracteurs sont en route pour commencer à creuser. Le projet énorme pour 3 tours de 40 étages et environs 450 appartements. La prochaine étape: le permis de construire. Egalement un immeuble commercial de 10 étages , un lac artificiel et des parkings.
Le projet initial d’une route souterraine sous le Kikar est abandonné à cause de toutes les oppositions y compris celle des résidents du Kikar.
C;est un chantier d’environs 1 milliard de Shekels