New urban master plan for Tel Aviv approved

The new urban master plan for Tel Aviv-Jaffa was approved earlier this month by the city’s local planning council by a 16-10 vote. The plan lays out, for the first time, what developers can build in the city, where, and how high. It allows for extensive construction of hi-rises and office buildings over the next couple of decades, which will ensure the city a solid tax base in the future.

Many have complained that very little was done to address public transportation issues beyond the existing light rail project and that affordable housing had just not been taken seriously by the city planners. Still any long term vision is better than no vision at all.

The master plan will now go to the district planning committee, where it is expected to undergo further changes. By law, it will then be deposited for formal objections by the public for a period of 60 days, before eventually being approved by the Interior Minister.

For more on the project motivations, here is a presentation from the city council made in 2011.

Jaffa property prices more than double in 4 years

The Israel Land Authority today published the results of the weekly tenders committee, in which a tender in Jaffa stands out - a tender for a 1.7-dunam (0.425-acre) lot in Jaffa's Ajami neighborhood, zoned for 17 apartments. A comparison of the tender's results with the previous tender in the area indicates that land prices have more than doubled.

The winner, D&A Initiation and Construction Ltd. offered NIS 21.8 million. The lot's development costs are NIS 2.3 million, which means that the company bought the land for at least NIS 1.42 million per apartment, including development. The bid was 105% more than the minimum price set by the Land Authority, but was almost exactly in line with the assessor's estimate. 13 bids were filed for the lot, located between Toulouse Street and Beit Pelet.

"The price we offered is completely realistic," D&A CEO Avner Schneider told "Globes" today. "This is a enclosed site on which it is possible to build a project with 17 apartments. We intend to build a boutique project on the site that will have 140-square meter apartments at NIS 30,000 per square meter. The planned project is close to another project under construction in the neighborhood and its prices are the same."

On the basis of Schneider's figures, apartments in the project will cost NIS 4.2 million each.
Schneider was referring to the Leora project by Almog DAY Holdings (2002) Ltd. The project, designed by architect Ilan Pivko, is under construction. Almog won the Land Authority tender for the lot, zoned for 19 apartments, in late 2007, with a bid of NIS 12.1 million, including development, giving a land price of NIS 638,000 per apartment. A comparison between the two lots in Jaffa's Ajami neighborhood indicates a 123% rise in the value of land in just a few years.

Source Globes

Housing Reform approved by the Knesset

The Israeli cabinet this past week unanimously approved the housing chapter of the Trajtenberg Report, eight months after the recommendations were submitted. The recommendations seek to respond to demands for affordable housing in last summer's social protest.

The reforms which were passed by the Knesset will basically seek to get more housing stock into the marketplace by doubling the property taxes on a variety of properties that sit vacant for extended periods of time. The social protests of last summer, brought to light the fact that there are a lot of vacant apartments and abandoned buildings in Israel's large cities. Some of these properties are vacant because foreign owners only use the apartments a few weeks per year. These apartments have been referred to as "ghost apartments".

To bring "ghost apartments" on to the market, the property tax ceiling on apartments that stand empty for over six months a year will be doubled. The government estimates that this measure will add to the market 15,000 apartments a year in high demand areas.As for apartments deemed unfit to live in, the exemption on the property will be valid for only nine months, after which the double property tax will be levied on apartments that are not renovated. Hopefully, this will provide some incentive for building and apartment owners to "get busy" with renovations and get the property to market.

Lastly, to prevent contractors who win tenders from delaying in building, a levy of up to 10% of the price of the apartments built will be imposed for not completing construction projects within two years from the receipt of the building permit.

Source Globes

White City website turned into video landing page

The White City Residence project has refreshed their website and turned it into a single flash video landing page. The new video released a few months back is now the only content on the site. The menu is made of bookmarks from the video. And gone are the live webcam links. No description of the project either other than the promotional video. Focus is clearly on collecting lead details for the final sales push.

Go check the new site at www.white-city.net.

A room with a view...

As the White City Residence project continues to rise, and as the developer still awaits for the final authorization to build floors 30 to 37, here are some pictures taken from the 15th floor of the tower and from apartments types A, B and C.

Enjoy the view of Neve Tzedek, Yaffo and the sea!

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Office rents in Tel-Aviv soared 16% last year

Tel-Aviv office rents recorded the second highest leap in Europe in 2011, according to the world's most comprehensive EMEA office market survey by CBRE real estate services company. Office rents in Tel-Aviv soared an average 16.07%; Moscow recorded the highest leap for the second consecutive year, with a 33.3% climb in rent prices per meter of office space.

Climbing office space rents coincide with the commercial real estate market estimate that Tel-Aviv, Israel's business metropolis, is heading for full occupancy within just three years. Owner of MAN Properties, CBRE's Israel representative, Jacky Mukmel said last week that "if you buy an office building today, you will have a tombstone of money". "The entire commercial real estate market is for sale and there is not one developer that will refuse a cash deal". Mukmel also said he does not know "who will be using all of the office towers that are planned to go up in Tel-Aviv in the near future. The Electra office building has been on the market for three years and marketing efforts are still underway".

According to CBRE's review, with the exception of several Eastern European and European capitals, office space rents in Europe remained static throughout 2011, while southern European markets such as Sophia and Belgrade declined. Furthermore, some markets such as Madrid, which remained static, are expecting declines in the upcoming year, claims CBRE.

Source Ynet

Confirmation of market uptick?

Bank Leumi warns that the rise in home prices could resume because of the decline in building starts, and the rise in rents, which might tempt investors back to the real estate market. The banks economists describe the rise in the supply of homes as “moderate”. ”The supply of unsold new homes remaining for sale has grown fairly moderately, because alongside the rise in demand that has taken place in the past two months, there has been a decline in the number of housing starts,” the bank says in its weekly macro-economic review released today. Housing starts totaled 43,648 units in 2011, compared with 40,505 in 2010. The average growth in the number of households in Israel is 39,000, but Bank Leumi points out that besides this “there is also demand from investors, from those seeking to improve their living standards, and from foreign buyers.”

In the final quarter of 2011, housing starts fell 13%, because of pressure on credit in the economy. “The fall in the rate of building starts, if it continues, is likely to lead once more to a considerable shortage in the supply of housing, and thus to renewed upward pressure on prices in the housing market, even in a situation of slowly rising unemployment,” the bank says in the review. Given low rates of interest and a public looking for investment alternatives, higher rents could tempt real estate investors back into the market: “Taking the high level of rents into account (rents rose 5.3% in 2011, compared with a 6.1% rise in new and secondhand home prices), potential apartment buyers are inclined to buy,” Leumi says.

Source Globes