2012 Real Estate situation on Israel has changed

-2012- Real Estate in Israel

By Ido Shani International Relations Representative – Keren Gad Group

Home prices in Israel were 2.66% higher in nominal terms in the third quarter compared with the corresponding quarter, and fell by 3.65% compared with the preceding quarter. The year-on-year rise in home prices declined from 16.82% in the third quarter of 2010 compared with the third quarter of 2009.

The fastest rising home prices were in Delhi, Sao Paulo, Hong Kong, Latvia"s capital of Riga, and Estonia"s capital of Tallinn. Ireland is at the bottom of the third quarter ranking, with a 13.5% drop in home prices compared with the corresponding quarter.

Global Property Guide states, "House prices in Israel fell 0.58% in the year to the third quarter of 2011, the first drop since 2009. During the latest quarter, house prices were down 3.65%. The moderation in home prices comes against the background of the continued increase in the number of building starts, the lagged effect of the increase in the interest rate, measures introduced by the Bank of Israel affecting mortgages, and steps taken by the Ministry of Finance in real estate taxation. The effect of these moves is expected to continue and be evident going  forward."

Apartments sold and rented

Second-hand apartments sold

Tel Aviv and central region

Hod Hasharon: A 280-sq.m. six-room house on a 250-sq.m. lot on Hayakinton St. was sold for NIS 3.3 million, down from the asking price of NIS 3.35 million (Re/MAX).

Rishon LeZion: A four-room apartment on Ben Saruk St. was sold for NIS 1.35 million A 100-sq.m three-room apartment on Maagal Hashalom St. was sold for NIS 1.35 million (Anglo-Saxon).

Ra"anana: A 95-sq.m. four-room apartment on Shlonksi St. was sold for NIS 1.85 million. A 120-sq.m. five-and-a-half-room apartment on Keren Hayesod St. was 2.9 million (Bank of Jerusalem)

Hadera:  A 100-sq.m. four-room apartment on Hasida St. was sold for NIS 735,000 (Re/MAX).

Or Akiva:  A 130-sq.m. five-room apartment on David Hamelekh St. was sold for NIS 785,000 (Re/MAX).

Karkur: A 165-sq.m. five-room house on a 250-sq.m. lot was sold for NIS 1.69 million (Re/MAX).

Jerusalem and environs

Jerusalem: A 55-sq/m. two-and-a-half-room apartment in need of renovation, on Efodi St., Rehavia, was sold for NIS 1.48 million. An 85-sq.m. three-room apartment on Bachar St., German Colony, was sold for NIS 1.85 million (Re/MAX).

Haifa and the north

Haifa:A 76-sq.m. three-room apartment on El Motenabi St. was sold for NIS 600,000 (Bank of Jerusalem). A 68-sq.m. three-room apartment on Shai Agnon St. was sold for NIS 370,000. A 55-sq.m. three-room apartment on Jaures St. was sold for NIS 495,000 (Re/MAX).

Carmiel: A 180-sq.m. six-room house on a 500-sq.m. lot on Baz St. was sold for NIS 1.47 million. A 110-sq.m. four-room apartment on Mivtzah Assaf St. was sold for NIS 772,500 (Re/MAX).

Housing construction at a 10 year high

According to The Central Bureau of Statistics reports ,78,000 homes were under construction at the end of September.

There were 32,400 housing starts in January-September, 32% of which were one and two-family homes, 12% more than in the corresponding months of 2010. There were 10,690 housing starts in the third quarter, the fourth consecutive quarter in which housing starts exceeded 10,000 units.

36% of the housing starts in January-September were in the Central District, 17% were in the Northern District, 16% in the Southern District, 12% in the Tel Aviv District, 9% in the Haifa District, 7% in the Jerusalem District, and 2.2% in Judea and Samaria. The largest increase in housing starts was in the Southern District – up 38% compared with January-September 2010, followed by a 21% increase in the Tel Aviv District, and a 13% increase in the Southern District. Housing starts declined slightly – by less than 1% – in the Haifa and Northern districts.

Minister of Housing and Construction Ariel Atias said, "The growth in housing starts is the activity that will have the greatest influence to bring down home prices."

Ido Shani Sevel – Gad Keren