Nadlan News

Israel's unemployment rate falls to all-time low

2012-01-11T20:25:00.002+02:00

Israel's unemployment rate fell to 5% of the civilian labor force in October 2011, an all-time low, the Central Bureau of Statistics reported today.

There has been a steady monthly decline of 0.1-0.2% in the unemployment rate since January, falling from 6.2% in January to 5.6% in May and 5% in October 2011.

The figures are surprising, given that economic activity is declining, including by labor-intensive export-oriented manufacturing. However, the unemployment rate is the economic indicator with the longest time-lag in its response to changes in activity.

Shekel strengthens after interest rate decision

2012-01-02T00:07:00.000+02:00

The Bank of Israel left the interest rate unchanged at 2.75% against analysts' expectations of a fall of 25 basis points. In addition, it cut its 2012 growth forecast to 2.8% from 3.2%, due to unstable global economic conditions resulting from the European debt crisis.

Auditor General Micha Lindenstrauss slammed the Housing Ministry on its conduct in "vacate-and-build" projects.

2011-12-30T01:07:00.002+02:00

Atias said, "Even in projects marketed to one developer, there is huge bureaucracy for vacate-and-build. It takes 5-6 years for a project to come into effect. Residents incorporate to find a contract; we don’t decide on the contract, because this is people's property… In the final stage, when the contractor is chosen, the residents want to get more. This is a problem for the contractor. They think that they'll make the fortune of their lives from the project.

Atias further added : "It's hard to execute these projects in the periphery. As a result, the Negev and Galilee get screwed ,it's frustrating to see how the wheels of state don’t work. "Vacate-and-build" is a great idea that doesn’t work for solving the problem of old apartments and building affordable housing".

Rents up 10% in two years

2011-11-27T18:13:00.002+02:00

The summer's social protest had no effect on the trend.

The Central Bureau of Statistics in Israel reports that the percentage of renters rose from 27% of the population in 1995 to 34% in 2008. High home prices, and the fact that most Israelis prefer to live in the center of the country, have caused renting to become increasingly prevalent.
The low supply of homes, including rental homes, is driving up rents. Moreover, the current measure to temporarily exempt the sale of second apartments from the betterment tax, is inadvertently liable to aggravate the shortage of rental apartments by reducing the inventory of second apartments that are rented out by their investor/owners.

A further aggravation :the supply of public housing has fallen over the years as the result of government campaigns to sell these apartments to their tenants, whilst not building new ones.

Housing Ministry to market land for 6,300 apartments

2011-10-23T22:31:00.000+02:00

The new tenders bring the amount of land marketed to 26,000 apartments so far this year.

"Increasing the housing supply is the main tool available to us to ease the housing shortage and lower prices," said Minister of Housing and Construction Ariel Atias. The road is still long, and we must end the ten-year housing inventory shortage, but I am pleased that the housing shortage is beginning to ease and that our efforts of many years are bearing fruit."

Most of the new land will be marketed in the periphery, including Beersheva, Dimona, Yeruham in the south, and Kiryat Motzkin in the north. Lots will marketed for 1,700 apartments in Rosh Ha'Ayin and for 42 apartments in Rishon LeZion.

Conflict doesn’t hurt home prices long term

2011-09-21T11:57:00.000+03:00

Conflict doesn’t hurt home prices long term, study finds
In Israel, war does not cool the real estate market.

Israel's assault on the Gaza Strip, Operation Cast Lead, lasted from 12/2008 through 1/2009.Once it was over, it took time for the real estate market to recover, there was a six-month slowdown., but once normalcy was restored, people rushed to buy apartments, and prices began to rise.

Between July and August 2006, all residents of northern Israel lived in air raid shelters, during the Second Lebanon War. It had an immediate impact on prices, but it had no long-term effect at all. Israelis are so used to conflicts that for them everything goes back to normal in just a few months.

Governor of the Bank of Israel: Home prices could double in 5 years

2011-09-21T11:53:00.000+03:00

Furthermore, He said that it was necessary to deal with the housing supply and bureaucracy.

"Why are we worried"?Stanley Fischer asked:" Because prices are rising by 16%, which means that prices will double within five years. This has to stop. The question is whether it will stop in a way that won't harm the economy,"

Who owns the land?

2011-09-18T15:19:00.002+03:00

As much as 93 percent of the land in Israel is either owned or managed by the state is coming under increasing scrutiny as Israel’s population increases and real estate prices keep going up.

In order to keep up with Israel’s population growth and burgeoning real estate market, The Israel Land Administration has to release Tenders for land to companies, who will build new apartments. During the recent real estate boom in Israel, the ILA has not been releasing new land fast enough and at prices that are reasonable enough for Contractors to make money. Consequently, new apartments are not being built at a sufficient enough rate to keep up with demand. Additionally, the planning process in Israel is the most cumbersome in the Western World. Prime Minister Binyamin Netanyahu was quoted this past week as saying that “it takes five or more years to plan an apartment in Israel."

Conflict doesn’t hurt home prices long term, study finds In Israel, war does not cool the real estate market.

2011-09-12T17:10:00.000+03:00

The unsettled security situation in the south caught the real estate market at a bad time: a freeze that has lasted for several months, combined with the protest movement. This reality again raised the question whether the security situation affects housing demand and prices. Since the latest clashes are too fresh to draw any conclusions, "Globes" examined previous confrontations. Israel's assault on the Gaza Strip, Operation Cast Lead, lasted from December 2008 through January 18, 2009. Euro Israel Development and Investment Ltd. builds homes in the south. CEO Ofra Hadad told "Globes", "People sold in a panic, lowering asking prices by tens of thousands of shekels, especially in Sderot and Ashkelon, because there seemed to be no solution to the situation. Buyers at that time profited later." Hadad says that once Operation Cast Lead was over, it took time for the real estate market to recover. "After the campaign, there was a six-month slowdown. There were no deals, but once normalcy was restored, people rushed to buy apartments, and prices began to rise," she says. Hadad believes that the Iron Dome anti-rocket batteries have changed the situation. "There's a slowdown," she admits, but believes that "things will get back to normal within days after everything ends." Dr. Danny Ben-Shahar and Dr. Yuval Arbel of the Technion Israel Institute of Technology's Center for Urban and Regional Studies, Dr. Yosef Toubul of the Jerusalem College of Technology, and Prof. Stuart Gabrial of UCLA's Ziman Center for Real Estate carried out a study to see whether the security situation affects home prices. Their findings do not support Hadad's confidence. The study examined the effect of firing on the southern Jerusalem neighborhood of Gilo on home prices there. Between October 2000 and April 2003, Gilo was frequently hit by fire from Beit Jala in the Palestinian Authority. Some apartments were at direct risk, while apartments that were not in the line of fire were nonetheless affected by the conditions. The study found that prices for apartments in the direct line of fire were 8% lower than similar apartments in the neighborhood. The study also found that home prices in the entire neighborhood, and not only for apartments in the line of fire, fell by 10%, and only recovered two years after calm was restored. Ben-Shahar told "Globes" that, at the peak of the shooting, apartment prices fell by 17%. "The riskier areas took longer to recover. Prices recovered 14 months after the shooting stopped." Classified ads site Yad2 CEO Roy Segev told "Globes", "The figures unequivocally show that apartment supply and prices have not fallen since Operation Cast Lead; on the contrary." He believes only a prolonged security crisis can affect prices. "We adapt to everything. Crises pass and things quickly get back to normal." Association of Contractors and Builders in Israel southern district chairman Eli Avisror agrees that real estate in the south is not affected by security incidents. As in the rest of the country, he told "Globes", "Prices jumped after Operation Cast Lead." Sderot is one of the towns that took the greatest number of hits by rockets fired from Gaza. As in other southern towns, the security situation did not stop prices from rising in Sderot. Alex Aviram, a realtor in Sderot for 15 years, told "Globes" that prices for three-room apartments doubled within three years. "Today, the security situation does not affect real estate in the town. Most people have safe rooms." The situation in Gilo is different from southern towns which still face security threats. But Ben-Shahar believes that the results of his study are applicable, and that cities such as Beesheva, Ashkelon, and Ashdod, which take fewer hits from rockets, need less time to return to routine, including home prices. Prices in towns with more incidents, such as Sderot, need more time to recover. Between July 21 and August 14, 2006, all residents of northern Israel lived in air raid shelters, during the Second Lebanon War. ZMH Hammerman Ltd. (TASE:ZMH) marketed homes in Carmiel and Tirat Hacarmel and was building a residential project in Haifa at the time. CEO Haim Feiglin says that the war had an immediate impact on prices, but that it had no long-term effect at all. "During the war, sales ground to a complete stop. Not just at the time, but for months afterwards," he told "Globes". Feiglin says that buyers returned to the company's sales offices after six months, and that prices did not fall. The soaring home prices nationwide did not omit northern Israel. "Five years after the war, and prices are much higher than before it," he says, adding, "Israelis are inured. We've seen a lot, and we know how to get back to normal." Feiglin remembers that there was a strong trend of home improvement after the war, with people moving to homes with safe rooms. "People realized the importance of reinforced rooms when they found themselves unprotected during the war. People were looking for safe rooms. We felt the demand at our sales offices," he says.

Netanyahu admits: There is no land to sell in 2012

2011-08-11T20:08:00.000+03:00

"Last year, the Land Administration marketed all the available land inventory for residential construction."
2012 will apparently be a catastrophic year for the marketing of land by the Israel Land Administration. We know this because Prime Minister Benjamin Netanyahu has explicitly said so.

A statement entitled, "FAQs about National Housing Committees Law" lists the advantages of the law and the positive effects it will have on the housing market. One of the questions that the prime minister had to deal with, as his statement puts it, "The opponents claim that there are 160,000 housing units the building of which could begin immediately."

The full answer to this question is, "Not true. There is no substantial planning inventory of state-owned land available for residences. Last year, the Israel Land Administration and the Ministry of Housing and Construction marketed all the available land inventory for residential construction, effectively scraping the bottom of the barrel."

Cutting to the chase, Netanyahu says that the Israel Land Administration has no available land to sell in 2012.

After Israel Land Administration director Yaron Bibi met the government's target of marketing land for 25,000 housing units a year, for two years, there is concern about a severe crisis and risk of another price spiral.

Cabinet approves NIS 100,000 per couple housing grants

2011-07-25T12:02:00.002+03:00

The list of places where the grants will apply was also approved.
Arad, Mitzpeh Ramon, Netivot, Ofakim, Sderot, and Yeruham, in the Negev; Acre, Beit She'an, Carmiel, Hatzor Haglilit, Kiryat Shmona, Naharia, Nazareth, Upper Nazareth, Safed, Shlomi, Tiberias and Yefia, in the Galilee. Settlements in Judea and Samaria will be reviewed separately. Although the list of towns is final, it could be subject to revisions after four years, when towns may be added to or relegated from the list

Minister of finance imposes betterment tax on second homes from 2013

2011-06-02T18:21:00.000+03:00

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).

Mishkan Index shows homebuyers in worst position since 2003

2011-04-03T11:50:00.000+03:00

Bank Hapoalim: The rise in home prices and the mortgage interest rate hikes
means homebuyers' conditions deteriorated further in February.

The average interest rate on 17-20 year housing loans (fixed-interest, CPI-linked loans) rose by 0.02 percentage points in February to 3.10% from 3javascript:void(0).08%. The average national wage barely changed. However, the unemployment rate fell to 6.1% in trend figures, which partly offset the drop in the index.

In mid-March, the Central Bureau of Statistics reported a 0.9% rise in home prices in February, and a 16.3% rise over the previous 12 months. Home prices have risen 60% since the low point in mid-2007.

The Mishkan Index examines the condition of homebuyers on the basis of four variables: home prices, the unemployment rate, mortgage interest rates, and the average national salary

Israel's skyscrapers are dwarfs

2011-03-23T12:09:00.000+02:00

The global real estate industry is reaching for the sky, and new figures state that 2010 broke new records for skyscrapers,4 skyscrapers over 400 meters high were completed in 2010 worldwide, taking the first, fourth, seventh, and ninth places as the world's tallest buildings. There are now 12 skyscrapers over 400 meters high in the world.

Israel has only one building that qualifies as a skyscraper (over 200 meters high) - the Moshe Aviv Tower in Ramat Gan, which was completed in 2000. Despite all the construction going on, and the highly publicized tower, Israel is not taking its place in the world of skyscrapers.The ostensibly tall towers that we see in Israel are dwarfs compared with the skyscrapers under construction in the world today.Israel has the know-how to build skyscrapers , however, few developers want to build skyscrapers in Israel. The problem is that a developer who wants to build a skyscraper faces opposition from the Israel Airports Authority and other statutory bodies, which strangle such initiatives. Israeli citizens will therefore continue to look enviously at skyscraper construction around the world, in ostensibly Third World countries, and will only be left with the option of visiting these skyscrapers as tourists.Since skyscrapers are an excellent solution to a shortage of land( which is growing worse in Israel), they ought to be rising here,but...Israel's real estate market cannot cope with skyscrapers. First, the higher a building the higher the management and maintenance costs, rendering such buildings unsuitable for residences for most of the population,only the very welthy can afford it.Secondly, tall buildings are more suited to new neighborhoods where residents are less worried about saving their vistas, removing the problem of mass objections against the construction of high-rises in older neighborhoods.

Netanyahu looks to drastic housing measures

2011-03-15T15:10:00.000+02:00

"We are raising entire generations who live with their parents. What's next? To
live with grandma and grandpa?"
Prime Minister Benjamin Netanyahu will submit to the cabinet a new plan aimed at dealing with the housing shortage. The plan includes the construction of thousands of housing units nationwide over the next 18 months.

Netanyahu said"I have no illusions,there will be objections...". Netanyahu added, "We must take drastic action. I am determined to undertake this reform. We don’t have years. I am sick of waiting. We won't wait any more!"

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.

The new commissions will be set up for 18-month periods. They are intended to deal with the housing shortage, which currently stands at 100,000 apartments. The reform was formulated together with Minister of Finance Yuval Steinitz and Minister of Housing and Construction Ariel Atias. It will apply only to apartments in the housing starts market above a certain height , which has not yet been decided . it will apply nationwide also including high demand areas.

"We must close the gaps," declared Netanyahu. "A combination of reforms at the Israel Land Administration and a road bypassing the planning commissions is the only way to deal with the housing shortage."

140,000 empty apartments in Israel

2011-02-28T12:45:00.002+02:00

The government is now working on a plan to tax owners of empty apartments.
The Central Bureau of Statistics reports that the number of empty apartments in Israel rose from 97,404 in 2000 to 140,300 in 2009(a 44% increase).
Occupation of even some of these apartments would greatly boost the housing supply and dramatically narrow the demand/supply gap.An empty apartment is defined as an apartment that is not permanently occupied for any reason, for example because it has been purchased by a foreign resident, has been transferred to heirs and is subject to an ownership dispute, is a holiday apartments, or has been sealed or abandoned, or is in ruins.The government is now working on a plan to tax owners of empty apartments, in order to render it not worthwhile to keep them in that condition. It remains to be seen if this will bring homes onto the market and lower prices.

Finance Commitee: Raise 1st home purchase tax threshold to NIS 1.6m

2011-02-21T19:34:00.002+02:00

Most apartments in high demand areas cost more than NIS 1.2 million.
Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism) told the government to raise the purchase tax threshold on a first home to NIS 1.6 million from the current NIS 1,139,000. He cited the fact that most apartments in high demand areas cost more than NIS 1.2 million. .

Ministry of Finance housing coordinator Reuven Kogan said that widening the purchase tax brackets and raising the threshold would affect tax revenuesand said that the median home price was NIS 865,000, so there was no genuine need to raise the tax threshold

. He further stated that, in 2010, 67% of buyers of a first home were exempt from the purchase tax, and that if the threshold were raised to NIS 1.4 million, the exemption would apply to 90% of buyers of first homes.

Consumer Confidence Index points to strong housing demand

2011-02-21T19:33:00.000+02:00

11.6% of respondents in the January survey are interested in buying an apartment in the next six months, up from 7.8% in December.
11.6% of respondents in the Consumer Confidence Index, compiled by Globes Research and Price Waterhouse Coopers CPAs Israel, for January 2011 say that they are interested in buying an apartment in next six months, up from 7.8% of respondents in December 2010. This is the largest monthly increase since 2009, and indicates the highest interest in buying a home since early 2010.

Housing demand up 13% in December

2011-02-08T13:45:00.000+02:00

New home sales rose 10% in 2010.
Housing demand rose 13% in December 2010, compared with November of the same year, the Central Bureau of Statistics in Israel reported today,

21,498 new homes (both privately and publicly built) were sold in 2010, 10% more than the 19,975 new homes sold in 2009.

Petah Tikva was the city with the highest demand for new homes in 2010, at 2,453 apartments, of which 2,268 were sold. It was followed by Jerusalem, Tel Aviv, and Ashkelon (where sales almost doubled compared with 2009), Netanya, Rishon LeZion, Kfar Saba, Ashdod, Rehovot, and Beersheva.

Bank Leumi is predicting that home prices in Israel, will rise by 5 to 10% in 2011

2011-01-30T18:30:00.000+02:00

They claim that in spite of efforts to increase the supply of apartments, the bank believes that demand will still outstrip supply in the near future.
Furthermore, the bank expects the inventory of homes for sale to remain low and so will interest rates,this will reflect further price rises, although at a much more moderate rate than in the last few years.

Economists estimate 0.3-0.4% December inflation

2011-01-19T12:19:00.002+02:00

Such an inflation rate is comfortable enough for the of Bank of Israel to keep the interest rate for February unchanged.
According to forecasts inflation in 2010 will be 2.6-2.7%, toward the upper limit of the government's 1-3% inflation target. The Central Bureau of Statistics will announce the CPI on 16/1/11

The housing item in the CPI (rent) is again drawing the most attention. This item stopped rising in the preceding two months, but analysts are hesitant to declare a new trend in the market. The housing item accounts for 21% of the CPI as a whole.

It is premature to say what the the Bank of Israel will do about the interest rate but it looks like it will choose to keep rate for February unchanged at 2%.

Housing minister markets land for 3,800 homes

2011-01-03T10:49:00.000+02:00

Half of the apartments will be in Lod and Ramle.

Minister of Housing and Construction Ariel Atias announced the marketing of land for 3,800 housing units by the Israel Land Administration (ILA). Since October 2009, the ILA has marketed land for more than 24,000 apartments nationwide.Most of the land in today's announcement is not in high demand areas,land for 1,300 apartments in Lod and for 720 apartments in Ramle.The ILA is also marketing land for 140 apartments in Petah Tikva, 190 apartments in Rishon LeZion, as well as lots in Ness Ziona, Kafr Kassem, Modi'in, Kadima Zoran, Gedera, and Rosh Ha'Ayin.In the south, the ILA is marketing lots in Dimona, Ofakim, and Ashkelon, and in the north, in Haifa and in the Nazareth area.

Israel's economic growth in 2010 bests forecasts

2011-01-03T10:47:00.002+02:00

Local economy expands by 4.5%, surpassing OECD average of 2.7%.

Israel's economy did better than expected, expanding by 4.5% this year, according to preliminary estimates. The average among the OECD nations is reportedly 2.7%.

While living standards apparently contracted in most of the West, here an index tracking the standard of living increased by 2.7% in 2010, officials from the Central Bureau of Statistics stated .

The inventory of new houses in Israel fell to 9,370 in August 2010, the lowest for many years.

2010-10-11T11:20:00.000+02:00

Israelis snapped up new homes during August.
Demand for new homes jumped 13% in August 2010 compared with the previous month of July , while sales of new homes soared 38% to the record levels that were last seen in May, the Central Bureau of Statistics reported .
The inventory of new homes at the present rate will only last for 7 months.The lowest the country has seen for many years.

Deutsche Bank blames low rates for house price rises

2010-10-11T11:19:00.000+02:00

Deutsche Bank has blamed low interest rates on the Israeli housing bubble. The bank insists that mortgages are the main growth driver in the housing market and that interest rates have driven prices higher, not supply constraints.Other sources not connected to the bank
Deutsche Bank said, "Our analysis shows that the decline in mortgage rates to all-time lows of 2.4% (vs. 5.5% average prior to 2008) has been the main factor driving housing prices higher rather than lack of supply. Prices started to rally in mid-2008 exactly at the time that interest rates declined and prime rate floating mortgages increased in popularity.
Bank of Israel Governor Prof. Stanley Fischer cut interest rates to an historical low as a result of the global economic crisis and credit crunch in the final quarter of 2008. Harverd observed, "Not by coincidence, this was the starting point for the rally in apartment prices."
Deutsche Bank reported that since the start of 2009 the median apartment price has risen 28% to NIS 979,000 or $252,000.