The Maki Group's Israeli Real Estate Blog Archives - The Maki Group - Tel Aviv Real Estate Brokerage

Your Guide to Tel Aviv’s New Metro System

The Maki Group — Mon, 25 Apr 2022 19:37:47 +0000

Metro systems are an essential part of any world-class city, with the first one being built in 1863 in London. The benefits of a rapid transit system are many, from being a greener and faster alternative to buses and cars, creating public jobs, higher capacity for commuters to get from point A to B, less land use, and overall lower cost of infrastructure maintenance for the cities that host them.

Now the Tel Aviv metropolitan area is joining the club with its very own highly developed rapid transit system consisting of both light-rail and subway tracks. The history of the the Tel Aviv metro system is long, first being proposed in 1960’s, with two stations even being built at the Shalom Tower and the Carmel Market, though tracks were never laid. In 2000 the plan was green lit yet again, with works beginning on the first line in 2009.

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What is TAMA-38? A Guide to Israel’s Most Popular Construction Regime

The Maki Group — Mon, 25 Apr 2022 19:34:34 +0000

“TAMA 38” began life as a national outline plan for reinforcing structures against earthquakes by granting increased building rights and shortening bureaucratic procedures for obtaining building permits, thereby encouraging homeowners to reinforce their buildings. The basic pitch: Developers and apartment owners invest in renovating and protecting the building in exchange for additional building rights and planning, construction and taxation benefits. Over time, the program was split into two main channels: renovations of existing buildings with the addition of new floors, parking spaces, and safe rooms, and projects where the old building is completely demolished, with a larger and taller building put up in its place (known as pinui binui – evacuation and reconstruction). This latter track guarantees new apartments for the previous tenants, alongside apartments for sale on the free market to cover the cost of the project and allow the developer to turn a profit.

The Planning Administration in the Finance Ministry recently announced that it does not intend to recommend extending “TAMA 38” beyond its current May 18, 2020 end date, leaving a big question mark over the continued existence of the program. Despite this, 15 years after it was signed into law, it has become clear that “TAMA 38” was not only an opportunity to reinforce old structures against earthquakes, but also a valuable way to upgrade and increase the value of property to everyone’s benefit. The developers received permission to build up to two floors or more and benefitted from the sale of the new apartments, and the tenants received a renovated and reinforced building without having to finance the work themselves.

To finish reading the article, read the rest on our new Tel Aviv real estate news blog!

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Tel Aviv Real Estate Market Report April 2022

The Maki Group — Mon, 25 Apr 2022 19:31:47 +0000

he Tel Aviv real estate market has been the subject of numerous news articles as of late, showing impressive growth in pricing, demand, and mortgage lending. This press exposure hasn’t been limited to Israel, but in the international press as well, with Tel Aviv finally being recognized as a global investment hub, not just for high-tech, but for residential and commercial property as well.January 2022 saw the largest month-by-month growth in Israeli real estate prices since 2011, growing 2.1% nationally. The entirety of 2021 saw Israeli residential real estate prices rise by 13%, whereas typically prices in Israel rise 7% per year.

The growth isn’t limited to prices, however, but also in the number of transactions. The net number of Israeli real estate transactions is up 50% from 2019, despite the Pandemic. While transactions are at an all-time high, however, it is interesting to note that this has been made up mainly of local Israeli buyers, with foreigners mainly inactive over the past two years due to travel restrictions.

While there were notable deals by foreign buyers being done sight unseen, the volume of absolute transactions by foreign nationals has been hit, while the total number of transactions are up. Now with the skies open and with the large influx of built-up demand by foreign buyers reported by real estate professionals, one can expect more deals and higher prices in the short term. Also of interest to note is that the number of real estate investors, define as those investors buying units to rent out, have dropped 70% since before the Pandemic, indicating that the buyers over the past two years have mainly been end-users buying for personal use. This is seen in the 10% increase in rental prices in Tel Aviv in 2021 as less rental units are available.

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What Is The Relationship Between Commodities Prices and Tel Aviv Real Estate Prices?

The Maki Group — Mon, 25 Apr 2022 19:06:57 +0000

We would like to expand the notion that the Tel Aviv Real Estate Market is behaving more and more like the Commodities Market.

Backwardation takes place when the current price of an underlying asset is higher than the price trading in the Futures Market. Sometimes, the concept of backwardation is misinterpreted with an inverted futures curve. Backwardation can occur as a result of a higher demand for an asset currently than the contracts maturing in the future through the futures market. The primary cause of backwardation in the commodities’ futures market is a shortage of the commodity in the spot market.

If you think of real estate as a commodity, I know it’s a bit of stretch, but let’s assume this is the case for a moment. Backwardation is the normal state. Intuitively, if you were considering two identical apartments, the only difference being that one is ready now and the second is ready in 3 years, you’d pay more for the former. There are many practical reasons for the premium that you’d pay. But beyond that fact, there is the concept borrowed from the options theory, of the time value of money. This is a core principle of Finance. A sum of money in the hand has greater value than the same sum to be paid in the future. This is one of the factors that explain why apartments for delivery in 3 years should be cheaper than an apartment ready immediately.

To finish our analysis, read the rest on our new Tel Aviv real estate blog here.

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Coming Soon in Tel Aviv: A New & Improved Carmel Market

The Maki Group — Mon, 03 Jul 2017 07:55:11 +0000

The Carmel Market is one of Tel Aviv’s most famous landmarks and tourist destinations, and will soon see a new and improved version of itself gracing the city’s main street. This week the Tel Aviv municipality announced its full renovation with an additional 320 apartments to be built on the surrounding streets. The market itself will be covered, air conditioned, and modernized. The new units will be approximately 50 square meters in size and will replace the old mew homes on the adjacent streets. Read more about the plans here.

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Tel Aviv Is a Top Destination for the World's High Net Worth Individuals | Tel Aviv Real Estate News

The Maki Group — Sun, 05 Mar 2017 07:25:49 +0000

According to an article published in the Independent, Tel Aviv ranks third in the world as the destination of choice for high net worth individuals. The report points out the exit of many European cities of such individuals, with Tel Aviv attracting more than 2,000 over the past year.The article attributes Tel Aviv’s attraction as a living and investment destination due to its booming economy, ever developing technology scene, and overall superb weather.
What will the influx of high net worth individuals means for the Tel Aviv real estate market? What will it mean for the prices of Tel Aviv luxury properties?

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Tel Aviv's Urban Master Plan | Tel Aviv Real Estate News

The Maki Group — Mon, 30 Jan 2017 11:16:01 +0000

Despite Tel Aviv having been founded in 1909 and merging with neighboring Jaffa in 1948, the city has never formulated an urban masterplan, that is, until today. Last month saw Tel Aviv-Jaffa mayor Ron Huldai sign the TA-5000 plan, creating a unified vision for the city thru 2025.
TA-5000 calls for the construction of 120,000 new homes throughout Tel Aviv, with an additional 5 million square meters of commercial space over the next 8 years. The plan foresees adding 86,000 new jobs to the city, and will be focused along the new light-rail and metro system. The residential real estate development is focused on the areas surrounding the Reading power station and Jaffa, much of which is slated for historic preservation. The boost in residential and office space will surely make a difference on the Tel Aviv real estate market in the years the come.

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Tel Aviv Real Estate News | Israeli Property Prices Continue to Rise

The Maki Group — Sun, 11 Dec 2016 09:28:05 +0000

Despite the Finance Minister Kahlon’s policies designed to slow the rate of appreciation in Israel’s real estate market, prices continued to rise according to the most recent government report. Tel Aviv prices are up 17% from 2015, and up an impressive 4% from last quarter.
Nationally, prices are up 9% from last year, and 2.5% from last quarter. Experts attribute this to the continuous flow of demand matched with the volume of property completions and active supply down from last year.

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Tel Aviv Real Estate News | Israeli Property Prices Continue to Rise

The Maki Group — Sun, 11 Dec 2016 09:28:05 +0000

Nationally, prices are up 9% from last year, and 2.5% from last quarter. Experts attribute this to the continuous flow of demand matched with the volume of property completions and active supply down from last year.

The post Tel Aviv Real Estate News | Israeli Property Prices Continue to Rise appeared first on The Maki Group - Tel Aviv Real Estate Brokerage.

Tel Aviv Real Estate News | Israel's High Rise Boom

The Maki Group — Wed, 07 Dec 2016 13:06:19 +0000

Traditionally Israelis dreamt of owning a a private home, complete with backyard, a fence, and a pool. Looking at the recent construction data, however, points to a new phenomena, one that we’ve seen already for quite some in the Tel Aviv real estate market for some time.

According to a study by the Israeli newspaper Yediot Aharonot, national construction starts of towers over 21 stories has risen by 70% since 2010. Thus far, 9,493 units have been completed in 2016, while 2010 saw 5,583 such high-rise units seeing completion. Indeed, an incredible 10% of housing units under construction this year are in such high-rises.

Tel Aviv, while being the city with the most amounts of construction of any municipality in the country, has a small number of completed high-rise units, with only 1,609 of the total 9,493, making up a little over 16%. This helps explain in real terms the discrepancy in pricing between high-rise buildings and their low-rise counterparts in Central Tel Aviv, where high-rise properties command anywhere from 25-50% above comparable units in a low-rise. High-rises, with their amenities and security are a hot commodity in the Tel Aviv property market, and based on the data, will continue to be so for some time.

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