White City Residence Update

A quick update with a few pictures taken earlier this month from the construction site....

Hat tip Kerem Israel.

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Tel Aviv: world's 29th-most expensive city

ECA International survey places Tel Aviv and Jerusalem in the top fifty, ahead of all other Middle-Eastern cities; Tokyo ranks number one.

Tel Aviv was ranked the 29th-most expensive city in the world in a recent survey released by ECA International, down from 18th place in 2010, making it the most expensive city in the Middle East. Jerusalem was ranked as the 33rd-most expensive city, down from 22nd place last year.

The most expensive city in the world for the second consecutive year, is Tokyo according to the survey. Rounding out the top five were two other Japanese cities, Nagoya and Tokohama, and Oslo and Stavanger in Norway. No other countries in the Middle East were in the top-50. Dubai was ranked as 175th-most expensive while Jeddah at 234th was the least expensive.

The figures were taken from from ECA’s Cost of Living Survey, which calculates the cost of living allowances for international assignees based on surveys that are carried out annually in March and September using a basket of day-to-day goods and services. The surveys provide data regarding employment conditions abroad, and as such do not take into account living costs such as accommodation and utilities, as these items are usually compensated for in expatriate packages. The surveys do cover the costs of food, basic services and general goods.

Despite BOI directives, new mortgages soar

Despite Bank of Israel directives restricting the variable interest component of mortgages to one-third of the total, the amount of new mortgages rose in May 2011 to a high of NIS 4.81 billion, according to the Bank of Israel. New mortgages granted in May were 34% higher than the NIS 3.58 billion granted in April. The May figure is close to the all-time high of NIS 4.82 billion in new mortgages in June 2010.

The Bank of Israel directive came into effect on May 5, but it will reportedly take several months until the new criterion applies to all mortgages. In addition, in the days before the directive came into effect, real estate sources said that there was a rush to secure mortgages by homebuyers seeking variable interest mortgages. The Bank of Israel also reports that variable interest mortgages continued to dominate the market in May. New variable interest mortgages accounted for NIS 4.17 billion of the total of NIS 4.81 billion in new mortgages granted during the month - 86.6%.

The average mortgage interest rate on Consumer Price Index (CPI) linked mortgages rose for the fourth consecutive month to 2.63% in May from 2.48% in April. The average mortgage interest rate on CPI-linked mortgages reached a low of 2.13% in September 2010. The average mortgage interest rate on unlinked mortgages rose to 4.22% in May from 3.97% in April.

Source Globes

Home prices still going up?

Despite data published by the Ministry of Finance this week, which found a fall in home prices, the Central Bureau of Statistics has reported a rise. According to the figures published in the Central Bureau of Statistics latest survey on home prices, the average price of an apartment rose by 1.5% in April 2011, and rose by 63.2% since the housing price index was begun in May 2007.

The Central Bureau of Statistics said, "The rise reflects the change in prices after taking into account the quality and type of homes. The data is not final because additional deals that have been carried out during this period have yet to be reported. Comparison between March and April 2011 and the corresponding months of last year, found that prices rose 15.3% over the past year. Comparison between February-March 2011 and the corresponding months of last year, found that prices rose 13.9%. Over the past few months it can be seen that house price rises are similar to those last February and in December 2010. Since January 2011, prices have risen 5% and during 2010 home prices rose 13%.

In the first quarter of 2011, the price of an average four room apartment in Israel was NIS 1,168,000 and the price of an average five room apartment was NIS 1,577,000. The price of an average four room apartment in Tel Aviv was NIS 2,479,000, and the price of an average five room apartment in Tel Aviv was NIS 3,427,000.

Source Globes

10 Herbert Samuel starting to sell

With rumors of the market slowing down, Ofer investments has started marketing the Ofer tower also known as 10 Herbert Samuel to outsiders including foreign buyers. The web site is now up at www.10hs.co.il and it is very nicely done, especially compared to the one of  White City Residence which even in version 2 is still quite poor.

With just 21 stories the building offers 41 apartments, two per floor, with the option of purchasing adjoining apartments to own the entire floor. All apartments, including the 7 lofts and the penthouse on the 21st floor have a sea view terrace and are designed for maximum interior flexibility with high ceilings and floor to ceiling windows.

Apartments are 200 sqm each not including the 31 sqm terrace and purchasing two adjoining apartments can provide with an amazing full floor home of 400sqm with a 62sqm terrace. The building offers also 7 lofts of 188 sqm each with a 27 sqm porch facing the sea and a 24 sqm back garden. Lastly he two top floors offer an enormous 728 sqm penthouse overlooking the Mediterranean with a 104 sqm terrace. But this one was snapped by Eyal Ofer for a cool $30 million last summer.

The regular apartments start at just NIS13 million, i.e. $3.8 million. Still, at more than $19,000 per sqm, they are not for the faint of heart! But if you are still interested, or if you are just curious, just check the video below:

Steinitz to impose betterment tax on second homes

Minister of Finance Yuval Steinitz's plan for halting the rise in home prices includes ending the temporary exemption on betterment taxes in December 2012, in order to prod real estate investors to sell second and subsequent apartments before 2013. The current exemption applies only in 2011-12. The second measure aims to convert apartments used for businesses back to residential use. "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 Steinitz.

At the press conference, Steinitz said, "For months, I have been considering additional major measures to halt and change the dynamic of housing prices in Israel. Housing construction has been reduced for almost a decade, and we estimate that a shortfall of 50,000 apartments is the result. In the past three years, this shortfall combined with the low interest rate, has resulted in a sharp rise in prices, which have reached a level that seriously harms society." Steinitz said, "Until now, we've been using 500-gram hammers to pound the problem of rising prices, but we’re now pulling out a five-kilogram sledgehammer to deliver a serious blow to home prices in the second half of 2011. I am keeping the 10-kg. sledgehammer in reserve, and if prices don’t fall by the end of the year, we'll considering using this bigger hammer."

Israel Tax Authority director general Yehuda Nasradishi is unimpressed by Steinitz's proposed measures. "I see almost no effect because I don’t see these guys selling their apartments so quickly," he said.