Home prices in coastal cities

A study by the Gazit-Globe Real Estate Research Institute at the Interdisciplinary Center Herzliya found that home prices in coastal cities rose by 35-56% in 2007-11, with Ashdod leading the gain. Home prices rose by 39% in Tel Aviv in 2007-11 and by 74% in 2000-11.

The rise in home prices was reflected in the mortgage market. Bank of Israel data show a 65.2% of mortgages in January-November were taken for homes costing more than NIS 1.2 million, including 29% of mortgages for homes costing more than NIS 2 million.

The banks believe that the strong trends in the housing market will continue in 2013, although dramatic steps in the housing market, if any, by the new government could turn things around.

Leumi Mortgage Bank CEO : Home prices won't fall dramatically

In response to the question of what will happen to apartment prices,Shuki
Burshstein does not have a clear-cut answer,"It is extremely difficult to
say what will happen in the future, since on the one hand we are in the
midst of a global crisis that is harming the Israeli economy, and growth has
slowed, but on the other hand, there is natural population growth, and
people have a real need for a place to live. How will this balance out? I
cannot estimate." It has been claimed that there will be fewer housing starts due to
contractors' inability to get easy finance , and that eventually prices will
once again rise.

Minister of finance imposes betterment tax on second homes from 2013

The exemption on investment apartments will apply until the end of 2012.
His plan for halting the rise in home prices includes ending the temporary
exemption on betterment taxes in December 2012, in order to encourage real
estate investors to sell second and subsequent apartments before 2013. The
current exemption(of selling up to 3 homes exempt from the tax instead of
only one evey 4 years) applies only in 2011-12.
The second measure aims to convert apartments used for businesses back to
residential use. The minister said:"Currently, 50,000 apartments or more,
mostly in central Israel, are used for businesses by dentists, lawyers, and
so on. We want to provide strong incentives to sell these properties by 2013
by giving a full exemption on the betterment tax," said the minister Israel Tax Authority director general is unimpressed by the above proposed
measure. He said:"I see almost no effect because I don't see these guys
selling their apartments so quickly,"(because the longer they hold on to
their apartments the more they will appreciate in price).

Housing Ministry markets land for another 2,985 homes in 21 cities and town nationwide

An especially large amount of land will be marketed in the Southern District, which the Housing Ministry says "has recently seen especially heavy demand".

Once again, most of the land that will be marketed is in the periphery and not in demand areas. Land for 117 apartments will be marketed in Yavne, land for 321 apartments in Modi'in, a lot for 17 apartments in Kfar Saba, a lot for 11 apartments in Tel Aviv's Neve Shalom neighborhood.Furthermore, land for 204 apartments will be marketed in the Haifa District.
Lots for 235 apartments will be marketed in Beersheva. Altogether, land for 1,461 apartments will be marketed in the Southern District, about half the total land in the present program.
Lots for 895 apartments will be marketed in the Northern District, including lots for 678 apartments in Nazareth.