One out of three apartments purchased during the second quarter of 2009 were bought for the purpose of investment as record low interest rates and volatile stock markets prompted investors to switch course, the Israeli Finance Ministry reported .
The percentage of apartments bought for investment reached a record following years of continued growth since 2002, when the rate stood at 22 %. In the second quarter of the year, 33 % of all purchased apartments were bought by investors," said the Finance Ministry.
Tuesday, December 29, 2009
Housing prices continue to rise
The Central Bureau of Statistics in Israel's(CBS) data shows that since the beginning of the year home prices have jumped 15%.
Home prices rose 2.2% in October. This followed a rise of 1.5% in September, and 2.4% in August.
CBS data shows that since the beginning of the year home prices have jumped 15%. Since May of 2007, when a trend of prices rises began, home prices have risen 32.2%.
Home prices rose 2.2% in October. This followed a rise of 1.5% in September, and 2.4% in August.
CBS data shows that since the beginning of the year home prices have jumped 15%. Since May of 2007, when a trend of prices rises began, home prices have risen 32.2%.
Update on prices in Ramat Bet Shemesh A
4 room apartments in RBS have already passed the NIS 900,000 mark and are now selling in the range of NIS930K-NIS960K
3 room apartments are selling for NIS 800k to NIS 830K whilst 5 rooms go for NIS1,300K to NIS 1,350k, an increase of 10 to 12% over 2008.
In the Sheinfeld neighbourhood prices tend to be similar to that of RBS A , except for the older buildings (about 20 years of age) there prices can be 5 to 10% less
In the old Bet Shemesh, prices rose over the las 2 years by about 35%, today a 3 room apt can be had for around half a million Shekalim (2 years ago the same
apartment was sold for NIS 370,000)
3 room apartments are selling for NIS 800k to NIS 830K whilst 5 rooms go for NIS1,300K to NIS 1,350k, an increase of 10 to 12% over 2008.
In the Sheinfeld neighbourhood prices tend to be similar to that of RBS A , except for the older buildings (about 20 years of age) there prices can be 5 to 10% less
In the old Bet Shemesh, prices rose over the las 2 years by about 35%, today a 3 room apt can be had for around half a million Shekalim (2 years ago the same
apartment was sold for NIS 370,000)
Sunday, November 29, 2009
45-day OK for adding 25sqm,pergolas,etc.
The reform to simplify planning and building procedures is underway. The Prime Minister's Office announced the approval of the draft recommendations for the reform.The objective is to speed up the granting of building permits not only for developers(90 day procedure), but also for individuals seeking improvements to their homes, such as closing in a balcony , building a fence, addintions of up to 25 sqm or the installation of an elevator in an existing building.
Only 15% of rental contracts quoted in US$
Israelis have increasingly followed the call of Bank of Israel Governor Stanley Fischer to stop fixing the prices of apartment rentals in dollars over the past two years as a result of the weakening of the greenback. "In the last two years rental agreements have switched from quoting dollar prices to prices in shekel," said Bank of Israel economists in a report to be published in the forthcoming Recent Economic Developments issue.Until 2007 contracts quoting dollar prices constituted about 90 percent of rental contracts; today the figure is 15%.In reaction to the highinflation era of the 1980s, Israelis began to quote prices of various items on the domestic market in dollars. In the housing market this practice continued for years even after inflation had fallen, until the recent fall in the dollar's value.
Monday, November 16, 2009
Buyers groups cost state more than NIS 500m
Buyers groups purchases land from private parties were not liable to VAT, which is not the case when a contractor makes a similar purchase. In addition, buyers groups do not pay VAT on development expenses. Since the homebuyer is a member of the buyers group that is building the building, there is no purchase tax either. Finally, since the buyers group is not a registered company, it saves the contractor's profit and VAT on it. 55% of buyers group operate in Tel Aviv, 25% in the Dan region, and 14% in the Sharon. In other words, more than 90% of buyers groups operate in metropolitan Tel Aviv. In addition, most of the homebuyers in buyers groups' projects buy the apartments for investment, not as residences.
New post office in RBS A, at last...!!
Intensive negotiations are currently underway in order to open the first and only branch of the post office in Ramat Bet Shemesh A.
The branch will be located in the brand new shopping mall on Nachal Timna and Dolev which is about to open in the next month.
(to see pictures of the new mall click here)
The branch will be located in the brand new shopping mall on Nachal Timna and Dolev which is about to open in the next month.
(to see pictures of the new mall click here)
Bank of Israel leaves interest rate unchanged
The bank says the decision "will help return inflation to within the target range and underpin the recovery in real activity."
Governor of the Bank of Israel Stanley Fischer decided to leave the bank's key interest rate unchanged for October, at 0.75%. The bank said in its announcement, "The decision to keep the interest rate for October unchanged at 0.75 percent will help return inflation to within the target range and underpin the recovery in real activity, while supporting financial stability."
The continued recovery in economic activity and the expectation of faster growth in Israel and world wide suggest that the current environment is one of recovery from the recession. .
Interest rates of the leading central banks around the world are low, and are expected to remain unchanged during the next few months.
The continued recovery in economic activity and the expectation of faster growth in Israel and world wide suggest that the current environment is one of recovery from the recession. .
Interest rates of the leading central banks around the world are low, and are expected to remain unchanged during the next few months.
Wednesday, October 28, 2009
Discount Bank optimistic on 2010 GDP growth
The bank also predicts that the shekel-dollar exchange rate will fall to NIS
3.60 to the US$.
It published an optimistic forecast for the Israeli economy, predicting faster growth for both this year and next than the Bank of Israel.
Discount Bank predicts that Israel's GDP(Gross Domestic Product) will grow by 0.5% in 2009 and 3% in 2010.
The Bank of Israel , on the other hand,predicts zero growth this year and 2.5% growth next year.
3.60 to the US$.
It published an optimistic forecast for the Israeli economy, predicting faster growth for both this year and next than the Bank of Israel.
Discount Bank predicts that Israel's GDP(Gross Domestic Product) will grow by 0.5% in 2009 and 3% in 2010.
The Bank of Israel , on the other hand,predicts zero growth this year and 2.5% growth next year.
Wednesday, September 23, 2009
Ramat Bet Shemesh Gimel
The Israel Land Authority has published a public tender for over 2,000 housing units to be erected in Ramat Bet Shemesh "G" , of the total amount 750 units will be built to first home buyers (ie people of lower economic means) the land to apartment ratio will be approximately NIS 162,000 per apt.
This cost to the builder represents land and land development costs(roads, footpaths, sewerage,etc).
Furthermore, the Bet Shemesh Municipality has declared that RBS G will be divided into 3 areas, namely: for the Ultra Orthodox, the National Modern Orthodox and the general public( traditional and secular)
This cost to the builder represents land and land development costs(roads, footpaths, sewerage,etc).
Furthermore, the Bet Shemesh Municipality has declared that RBS G will be divided into 3 areas, namely: for the Ultra Orthodox, the National Modern Orthodox and the general public( traditional and secular)
Monday, September 14, 2009
Property rent rises
Property rent rises
Rents in most of Israel's large cities rose in August 2009 for the second consecutive month, after a brief halt.
The average rent of a 3 room apartment in Tel Aviv rose by 4.2% in August to NIS 4,485 per month, after rising 2.4% in July.
The average rent of a 3 room apartment in Beersheva rose by 2.7% to NIS 1,900 per month.
The average rent of a 3 room apartment in Haifa rose by 2.3% to NIS 2.250 per month.
Jerusalem was the only large city where apartment rents were stable or fell in August.
Rents in most of Israel's large cities rose in August 2009 for the second consecutive month, after a brief halt.
The average rent of a 3 room apartment in Tel Aviv rose by 4.2% in August to NIS 4,485 per month, after rising 2.4% in July.
The average rent of a 3 room apartment in Beersheva rose by 2.7% to NIS 1,900 per month.
The average rent of a 3 room apartment in Haifa rose by 2.3% to NIS 2.250 per month.
Jerusalem was the only large city where apartment rents were stable or fell in August.
Tuesday, September 8, 2009
Tel Aviv rent rises
Rents in most of Israel's large cities rose in August 2009 for the second consecutive month, after a brief hiatus. Second hand sales winwin reports that the average rent of a three-room apartment in Tel Aviv rose by 4.2% in August to NIS 4,485 per month, after rising 2.4% in July. The average rent of a three-room apartment in north Tel Aviv rose by 2.1% to NIS 4,950 per month.
The average rent of a two-room apartment in central Tel Aviv rose by 5.3% to NIS 3,800 per month in August. The average rent of a two-room apartment in north Tel Aviv rose by 4.1% to NIS 3,700 per month.
The average rent of a two-room apartment in central Tel Aviv rose by 5.3% to NIS 3,800 per month in August. The average rent of a two-room apartment in north Tel Aviv rose by 4.1% to NIS 3,700 per month.
Sunday, September 6, 2009
Tight supply will raise home prices
Bank Leumi stated, "Since the start of the year, there has been a rise in new home sales due to the increase in demand, while we're seeing that the present supply is insufficient to maintain the multi-year equilibrium without raising prices. It further adds that the interest rate hike by itself will not help to reduce housing prices, since it is necessary to increase the supply of new homes.
Apartment prices rose over the past 12 months because of the limited supply and the low interest rate, which rendered other investment instruments less worthwhile.
The Central Bureau of Statistics stated that there were 14,790 housing starts in the first half of 2009, 3.3% fewer than in the first half of 2008. It estimates that the current rate of housing starts will result in a shortfall of at least 8,000 homes compared with demand.
Sunday, August 30, 2009
Israeli home price rises fastest in world
The second quarter survey by "Global Property Guide" indicates signs of recovery in some residential real estate markets around the world.
The survey found that housing prices in Israel were 8.4% higher in the second quarter of 2009 than in the corresponding quarter of 2008 - the highest growth in any market in the survey.
Housing prices rose in the second quarter in seven countries where they had fallen in 2008: an increase of 3.73% in Australia whilst in New Zealand by 3.31%
Other countries with increases are:China, Portugal, France, Sweden, and Hong Kong .
Housing prices in most markets were still lower in the second quarter than in the corresponding quarter, indicating that the crisis in the global residential real estate market is not yet over.
The survey found that housing prices in Israel were 8.4% higher in the second quarter of 2009 than in the corresponding quarter of 2008 - the highest growth in any market in the survey.
Housing prices rose in the second quarter in seven countries where they had fallen in 2008: an increase of 3.73% in Australia whilst in New Zealand by 3.31%
Other countries with increases are:China, Portugal, France, Sweden, and Hong Kong .
Housing prices in most markets were still lower in the second quarter than in the corresponding quarter, indicating that the crisis in the global residential real estate market is not yet over.
Monday, August 24, 2009
Israel's Minister of Finance: The Israeli economy is on the road to recovery
The positive indicators quoted by the Minister include, among others:
The large rises on the Tel Aviv Stock Exchange and other global stock markets
The 1% annualized growth in Israel during the second quarter of 2009
Higher direct and indirect taxes collected in June
The rise in the Bank of Israel's State of the Economy Index
The improvement in the industrial production index and production in the commercial sector
The large rises on the Tel Aviv Stock Exchange and other global stock markets
The 1% annualized growth in Israel during the second quarter of 2009
Higher direct and indirect taxes collected in June
The rise in the Bank of Israel's State of the Economy Index
The improvement in the industrial production index and production in the commercial sector
Monday, August 17, 2009
Israel's Gross Domestic Product(CPI) up 1% in second quarter
The Israeli economy seems to be pulling out of recession ,after two quarters of economic contraction.
In addition, Central Bureau of Statistics' figures also show that exports rose by an annualized 5.3% last quarter
The Bank of Israel is likely not to raise interest rate despite the CPI increase, since an interest rate hike would further strengthen the shekel, in turn hurting Israeli exporters further.
The official Bank of Israel interest rate at the moment stand at an all time low 05%
In addition, Central Bureau of Statistics' figures also show that exports rose by an annualized 5.3% last quarter
The Bank of Israel is likely not to raise interest rate despite the CPI increase, since an interest rate hike would further strengthen the shekel, in turn hurting Israeli exporters further.
The official Bank of Israel interest rate at the moment stand at an all time low 05%
Wednesday, August 12, 2009
State of the Israel economy and interest rates
Inflationary expectations for the next 12 months, as reflected in the capital market at the beginning of July, stand at 2.8%,
at the upper limit of the Government's inflation target for the year (which was from 1% to 3%).
As a result, the effective real annual interest on Bank of Israel sources is negative, at the rate of 2.5%.
at the upper limit of the Government's inflation target for the year (which was from 1% to 3%).
As a result, the effective real annual interest on Bank of Israel sources is negative, at the rate of 2.5%.
Monday, August 3, 2009
Record price paid for a penthouse(duplex) in Tel Aviv
The price paid for this property located on the 23rd floor, near the Dolphinarium ,in Tel Aviv was NIS 110 million! (approx $US 30 million)
This represents a cost per square meter of NIS 100,000 (approx $US 27,000)
Other record purchases were:
Hertzliah Pituach price paid NIS 96 million 1,000 sqm home (NIS96,000 per sqm)
Rotshild st. Tel Aviv price paid NIS 74 million 900 sqm apartment (NIS74,000 per sqm)
Monday, July 27, 2009
Bank guarantee
The Israel district court in a recent court case has indicated that the law that currently applies to contractors about providing a bank guarantee to safeguard the home buyer in case he goes bankrupt, equally applies to an investor who purchases a commercial property such as a shop or an office.
Thursday, July 23, 2009
Comparison between Israeli Residential Real Estate Transactions and U.S. Residential Real Estate Transactions
Many people are nervous about entering into Real Estate transactions in Israel for many reasons. In Israel, the real estate transactions are conducted in Hebrew, a language they are not completely familiar with. They are not used to Israeli business mentality. Purchasers who are not native Israelis feel that the process is different in Israel than in their native countries, thereby exposing them to more risk. Below you will find a list of practical differences between U.S. real estate transactions and Israeli real estate transactions.
ISRAEL | USA | |
Real Estate Agents’ Fees | The standard amount is 2% of the price from both buyers and sellers, plus V.A.T . | Sellers pay fees. Negotiable, but usually between 2% - 6% of the price. |
Lawyers’ Fees | Fees vary between 0.5% - 2% of apartment price, plus V.A.T. | A flat rate of $1000 - $1500 per deal. |
Title Search | Completed by the lawyer. Title insurance exists but is not very prevalent. | Completed by the insurance company which issues title insurance. |
One Lawyer for Both Parties | Permitted. | Permitted if the parties sign conflict waivers permitting one attorney to represent both sides. |
Payment Schedules | The payment schedule varies depending on the needs of the parties. Some money is held in escrow against fulfillment of certain duties by the seller, but it is virtually never 90% of the price. | 10% at the signing, in escrow. 90% at the closing (transfer of rights). |
Mortgages | Mortgages can be transferred from one apartment to another. The reason for this is that some mortgages have special rights attached (such as the oleh mortgage). The seller can transfer such a mortgage to his new apartment so as not to lose these rights. This whole process also affects the payment schedule. | Mortgages are not transferrable to another apartment. When you sell a property, you pay off the mortgage on the property and then have to get a new one any new property you buy. |
Taxes | The purchaser pays a Purchase Tax and the seller pays a Capital Gains Tax and Sales Tax. | Capital Gains Tax is paid by the seller, plus a transfer tax of 1%. |
Linking of Price | The prices of second hand apartments are usually linked to the U.S dollar. The prices of new apartments under construction are usually linked to the Building Index, but are sometimes linked to the Consumer Price Index or the U.S. dollar. | Prices are not linked. |
When Is The Deal Binding? | Upon signature of both parties. | Upon signature of both parties. |
Protection of Monies | In contracts for new apartments still under construction, the money is protected by a bank guarantee or insurance policy. | In contracts for new apartments still under construction, the money is held in escrow. |
Who Pays the Construction Company’s Legal Fees? | Usually the buyer. | The construction company. |
Freehold Land | Much of the land is freehold. The buyer gets a long term lease for 49 or 99 years from the government. | This is not prevalent. |
Dictionary of Real Estate Terms English - Hebrew
Government Authorities | Israel Land Authority | Minhal Mikarkaei Israel |
Israel Land Registry | Lishkat Rishum M’Karkaim (TABU) | |
Register of Mortgages | Rasham Hamashkenot | |
Municipality | Iriah | |
Taxes | Purchase Tax | Mas Rechisha |
Capital Gain Tax | Mas Shevach | |
Municipal Tax | Arnona | |
Betterment Tax | Hetel Hashbacha | |
Long Term Lease | Chachirah L’Dorot | |
Building Maintenance Fee (paid monthly) | Vaad Bayit | |
Bank / Mortgage | Mortgage | Mashkantah |
Transfer of Mortgage | Grirat Mashkantah | |
Freezing of Mortgage | Hakpa’at Hamashkantah | |
Payment of Mortgage | Siluk Mashkantah | |
Property Appraiser | Shamai | |
Realtor / Broker | Real Estate Agent | Metavech |
Real Estate Agency Fees | Dmei Tivuch | |
Legal issues | Lawyer | Orech Din (m), Orechet Din (f) |
Zoning Law | Tochnit Bniat Arim (TABA) | |
Building Permit | Heter Bniah | |
Illegal Building | Charigat Bninah | |
Notary | Notarion | |
Notarization | Ishur Notarioni | |
Bank Guarantee | Arevut Bankait | |
Transfer of Rights | Havarat Zchuiot | |
Memorandum of Understanding | Zichron Dvarim | |
Contract | Chozeh | |
Cancellation of Contract | Bitul Chozeh | |
Enforcement of Contract | Achi’Phat Chozeh | |
Ownership | Ba’alut | |
Property Registry | Chevra Meshakenet | |
Power of Attorney | Yipuy Koach | |
Irrevocable Power of Attorney | Yipuy Koach Bilti Chozer | |
Guarantor(s) | Arev / Arevim | |
Technical | Technical Specifications of Property | Mifrat Techni |
Engineer | Mehandes | |
Civil Engineer | Mehandes Ezrachi | |
Structural Engineer | Mehandes Constructziah | |
Architect | Adrichal |
Homebuyers prepared to pay more
A real estate survey conducted in July 2009 by a well know financial
newspaper in Israel found that the average top price people are set to pay
for a home has risen to NIS 979,746.This represents an increase of 21% from
the survey conducted in January 2009.
The survey also found that 85% of home seekers were looking for pre-owned
homes as compared to 46% for new ones.
newspaper in Israel found that the average top price people are set to pay
for a home has risen to NIS 979,746.This represents an increase of 21% from
the survey conducted in January 2009.
The survey also found that 85% of home seekers were looking for pre-owned
homes as compared to 46% for new ones.
Wednesday, July 15, 2009
48% of Israelis: Environmentally friendly homes important
However, only 16% know what this means.
Environmental awareness is rising in Israel, even as many Israelis have no idea what it means, according to a survey made recently.
Civil engineering has in recent years harnessed environmentalism in the development, planning, and construction of projects, such as building on prefabricated recycled construction material, use of water saving and recycling systems, soil preservation, the removal of contaminants, use of solar, wind, and hydro energy, and the use of quiet transportation
Experts in the field predict that green construction will become the popular standard within five years
Monday, July 13, 2009
Other purchasing costs
Lawyer's Fee
Lawyer's Fee
Your lawyer will ask for 0.5% - 1% plus VAT on the amount for the property to draw-up the contract and register your home.
He/she may add other expenses if you live overseas. It is important that the lawyer be knowledgeable about the city in which you are buying your home (it is not recommended to use a friend or family member.)
Never sign a contract with a builder without your lawyer first reviewing it. You will often be told that the contract is standard, but it is usually completely in favor of the contractor and against your best interests.
It is not uncommon in second hand transactions for the parties to use the same lawyer to save costs. Make sure that the lawyer is completely unbiased toward either party.
The agent charges 2% plus VAT. This is the standard charge in Israel. A good agent will save you more money than the commision you pay. He knows which buyer is keen to sell and what is more suitable to your needs. Thus he /she will save you a lot of time and energy by taking you to the right properties.
There are many mortgage options available in the real estate market today,for example:fixed interest loans, variable interest plus indexation, dollar linked, etc. Clarifying and determining the best mortgage option is not an easy task (it depends on the borrower's age and in what currency his income is paid in,etc). A mortgage broker works independently of the banks to determine the most suitable mortgage for a particular client and to negotiate the most competitive rates and terms available. A mortgage broker also helps clients build their application, tailor made to each mortgage lender's criteria, to ensure the best chance of approval.
The fee charged is 1% + VAT of the amount of the mortgage taken.
should you wish, you can have the property checked by a qualified engineer or surveyor before you sign the contract. He can provide a written or oral report. A written report is usually made when buying in a new project (as this report has a legal standing in court). The cost of a written report is around US$ 500 (depending on the size of the property).
A verbal report usually costs half (US$250 - US$300). A verbal report is usually made for pre-owned properties since "you see what you get".
Make sure to have a licensed and reputable engineer inspect the property.
Sunday, July 12, 2009
Closing Costs on Purchasing
Closing costs range between 5% and 7% of the cost of the apartment. This should not be overlooked when applying for a loan.
when buying from a builder, one normally pays between 1 and 1.5% plus VAT to the contractor's lawer. This is only in the case of first hand apartments. The lawyer not only prepares the contract but also keeps a register of all the new owners and then formally registers the owner in TABU (The Official Goverment Titles Office). This transfer may take place up to 5 years from the date of purchase.
This tax is payable within 50 days of signing the contract. You can arrange with the lawyer to pay it all at once or in installments.
At the signing of the contract, give the attorney a post-dated check for 50 days from the date the contract was signed. You can also pay it yourself at the post office. ( The lawyer will provide you the relevant form). This tax must be paid in cash or with a bank check. The amount of the purchase tax is based on the shekel price of the property that appears in the contract.
The rates are as follows: (Between 16/1/2009 and 15/1/2010)
| New Inmigrants | |
Until 1,318,400NIS | 0.5% |
Above 1,318,400NIS | 5% |
Single Residential Home | |
| Until 1,026,660NIS | 0% |
| From 1,026,660NIS Until 1,442,870NIS | 3.5% |
| For The Remainder Above 1,442,870NIS | 5% |
Second Residential Home | |
| Until 873,500NIS | 3.5% |
| For The Remainder Above 873,500NIS | 5% |
| Land Plot | 5% |
| Shop | 5% |
Thursday, July 9, 2009
The professional Licensed Realtor
A broker's commitment is to serve his clients in the process of buying, selling, renting and/or managing their property.
This requires a thorough knowledge of the market, strong negotiating skills, ability to settle last minute disagreements, promptness and reliability.
A good agent can provide to potential home purchasers accurate and fair pricing based on current market trends.
He analyses statistics on past and current sales in order to provide a fair estimate of the actual market value of a particular property for sale and prepares an optimum marketing plan including best advertising channels for the particular home in question, in addition to useful tips on how to best display the home for sale.
He is able to provide critical information regarding neighborhood demographics and other relevant information. This will save the buyers invaluable time, and ensure that they don't buy in an area not suitable for them. (This is crucial especially for Olim!)
Sometimes the "chemistry" between the parties is just simply not there (cultural differences usually add to this) a professional broker uses his diplomacy and tact to avoid unnecessary friction between the parties, which in his absence could lead to one party refusing to deal with the other, resulting in the cancellation of a deal.
A good agent will work with the lawyers on both sides so that the contract can be signed promptly, avoiding unnecessary delays.
Finally, a professional broker will attend the contract signing just in case there is a dispute at the last minute; and if the argument is not of a legal nature (like closing date or payment terms, etc.) lawyers do not like to get involved.
This requires a thorough knowledge of the market, strong negotiating skills, ability to settle last minute disagreements, promptness and reliability.
A good agent can provide to potential home purchasers accurate and fair pricing based on current market trends.
He analyses statistics on past and current sales in order to provide a fair estimate of the actual market value of a particular property for sale and prepares an optimum marketing plan including best advertising channels for the particular home in question, in addition to useful tips on how to best display the home for sale.
He is able to provide critical information regarding neighborhood demographics and other relevant information. This will save the buyers invaluable time, and ensure that they don't buy in an area not suitable for them. (This is crucial especially for Olim!)
Sometimes the "chemistry" between the parties is just simply not there (cultural differences usually add to this) a professional broker uses his diplomacy and tact to avoid unnecessary friction between the parties, which in his absence could lead to one party refusing to deal with the other, resulting in the cancellation of a deal.
A good agent will work with the lawyers on both sides so that the contract can be signed promptly, avoiding unnecessary delays.
Finally, a professional broker will attend the contract signing just in case there is a dispute at the last minute; and if the argument is not of a legal nature (like closing date or payment terms, etc.) lawyers do not like to get involved.
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