Borrowing becoming more difficult going forward

Homebuyers will be allowed a mortgage up to 60% of the price of a property instead of 70%. The Bank of Israel has issued stricter mortgage instructions to the country's banks. In an effort to slow the pace in the rapid rise in the prices of homes over the past few years, Supervisor of Banks Roni Hizkiyahu today published new guidelines for mortgages.

According to the new instructions, homebuyers will be allowed a mortgage of only up to 60% of the price of a property instead of 70%. Banks going above 60% will be required to set aside 0.75% of credit extended for doubtful loans.

The new instructions will in effect mean that homebuyers will need 33% more equity in order to buy a property because they will be required to find 40% of the value of the home instead of 30%. Banks wanting to give mortgages above 60% will likely charge as much as 1% or even 1.5% higher interest rate in order to comply with the extra expense involved due to the new doubtaful debt guidelines.

The Bank of Israel said, "There is no bubble in the housing market and we will make sure that there won't be."

Source Globes

No new skyscrapers in central Tel Aviv!

The municipality has decided not to approve the construction of any more skyscrapers in the center of the city. "The Assuta building project on Jabotinsky Street will be the last of its kind," chairman of the local Planning and Construction Committee Doron Sapir told Yedioth Ahronoth's "Mamon" financial paper. According to the new plan, no more towers will be built between the seashore and Ibn Gvirol Street, or between the Yarkon River in the north and Eilat Street in the south. In addition, the entire area east of Ibn Gvirol will be flooded with high-rise buildings over 18 stories tall.

The new policy is part of an outline plan for Tel Aviv 2025 formed by the city's engineering administration. The plan does not include buildings already under construction, but certain projects in the planning stages have been scrapped. "The city center must not be cut off by towers, but they should be concentrated along main marginal routes," Sapir said. "The plan is to expand the preserved area in the center of the city. All towers in these regions will not be approved, despite the dozens of plans that are presented to us."

However, the number of towers in areas east of Ibn Gvirol will not be limited, and will even be increased. The city's plan, which outlines the face of Tel Aviv in the year 2025, does not include construction on the city's Sde Dov Airport lot, meaning the airport is slated to remain active in the coming years. Around the airport, 12,000 apartments are slated to be built in low-rise buildings. "They have been evacuating Sde Dov for 50 years now," said Tel Aviv's municipal engineer, Hezi Berkovich, "But we cannot wait with the plans around the airport, so the buildings planned for northwest Tel Aviv will not be high."

Source Ynet News