90% mortgages still available

According to Bank of Israel data, last November, 2.5% of mortgages were taken at LTV ratios of more than 90%. 3.9% were taken at LTV ratios between 75-90%, and 33.6% at LTV ratios between 60-75%. In other words, despite Bank of Israel limitations and prohibitions on high LTV ratio mortgages, people are still receiving them.

If a bank agrees to grant a high leverage mortgage, the purchasers will most likely insure themselves through EMI - Ezer Mortgage Insurance Company Ltd. of the Harel Group. If borrowers fail to make their mortgage payments, the responsibility is transferred to EMI, which is a monopoly in its field. "We complement what the banks do by enabling them to widen the number of options available to clients," said EMI senior VP Tsila Daskal. "In this way, a young couple with little capital, and no rich father, can purchase an apartment and stop paying rent."

With respect to mortgages taken at the highest LTV ratio (90%), the rule of thumb is that for each NIS 450,000 of the mortgage, borrowers pay EMI a premium of NIS 100 a month. For example, a house that was purchased for NIS 1.8 million costs another NIS 400 a month.
On the face of it, it seems that higher financing equals higher risk to borrowers, Daskal admits. But according to its data, the rate of borrowers who make their mortgage payments more than three months behind schedule and are insured by EMI is 2.94%, compared with 4.6% of total mortgage owners.

"In Israel homes are not considered to be stocks. In the US, if the price falls, then the owner stops paying the mortgage. Loans in Israel are recourse, which is very different from the situation overseas. In general a borrower in the US can decide to bring the keys back to the lending bank, and be done with it." The main risk factors are a rise in unemployment rates or a rise in interest rates. "In a large number of insurance-related law suits in which we have been involved, we paid the loan when the reason for failure was an event that took place during the term of the loan, such as a divorce of a layoff.

EMI is supervised by the Commissioner of Insurance, and therefore its premium rates are uniform. Underwriting decisions are either approved or denied. In other words, EMI cannot charge higher premiums for clients who seem riskier. So, how can the lower rate of late payments be explained? "We are able to achieve these results because of the double filtering system, which finds the smaller holes," Daskal explains. EMI's rejection rate stands at 15%.

Source Globes

Tel Aviv: The heart of Start-up Nation

There’s a fight taking place among some European capitals to be the primes inter pares of tech hubs. London, Berlin, Paris, Dublin are all trying to claim the throne. But there is already an occupant, and it is unlikely that any of the pretenders are going to dislodge it: Tel Aviv. Israel is the start-up nation, and Tel Aviv is its hub. Ron Huldai, the mayor for the last 13 years, has seen the city transformed; in 1998 it was nearly bankrupt, now it has a triple-A credit rating from Standard & Poor’s. Mr. Huldai is an unlikely champion. He’s a retired air force brigadier-general with 26 years of service and a former headteacher of the Herzliya Hebrew Gymnasium, the school that was responsible for the rebirth of Hebrew.

‘I Did Not Create Beaches in Tel Aviv’

When you try to push Mr. Huldai on what he did to make Tel Aviv a center of entrepreneurialism, it’s a bit like pushing string. “I didn’t do anything,” he says. What advice would he give to other cities, such as London or Berlin? “I can’t give them advice. I don’t think I did anything by myself. I did not create the beaches in Tel Aviv.” When pushed harder, he can think of just two initiatives: public Wi-Fi in the city’s open spaces, and providing a library and center for start-ups to meet and have coffee. Just as you are beginning to think this is all a waste of time, he explains his strategy. It is nothing to do with high-speed Internet or venture capital or any of the mechanics of running a business. His strategy is about the people, not the organizations.

“We are creating a good place for hi-tech people to live in — I am doing it for the people working in hi-tech,” he said. There is a parallel with the positive steps he has taken to make Tel Aviv a gay-friendly city. After his election, he successfully embarked on a policy supporting the LGBT community. The city was recently named the world’s best gay city‎. “It is about building an environment that is supportive,” he said.

The Field of Dreams Model

One of his first objectives was trying to renovate the main street, Rothschild Boulevard. It was rundown and dirty, and the banks were threatening to move out. It was a key move. The street is now a bustling, active thoroughfare with numerous stalls. Young people like to hang out there.

“Tel Aviv had become a city that people used, not a city they lived in,” he said. Mr. Huldai’s strategy is the “Field of Dreams” model — if you build it, they will come. Make the city a place where the sort of people who run start-ups will want to be. Most digital media entrepreneurs are young, countercultural and attracted to cities that are vibrant, diverse and international. As he proudly said in his presentation, one-third of the city is under the age of 35, and there is one bar for every 200 residents.

That Israel is a start-up heavyweight is without doubt. A recent report commissioned by the city identified 600 start-ups in Tel Aviv/Yafo. Mr. Huldai’s vision is to attract more foreign investment, and more international students and workers. He is pressuring the government to change visa requirements. There are significant obstacles. The city’s own report, commissioned to look into furthering the city’s tech ambitions, highlights the size of the local market and talent pool, the high cost of living, language, increasing competition, bureaucracy and location as obstacles.

But, says Mr. Huldai, “The main issue is the perception of the situation and the perception of the state of Israel.” And this is getting worse, not better. “The whole attitude of the people around the world to Israel is different to what it was 30 years ago,” he said.

Source Wall Street Journal

White City Residence January Update

The White City Residence Tower, now up to floor 15, continues to go up, with Shalom tower in the backgroud and the recently complete Rothschild Ehad on the right.

Check the slideshow below for more pictures of the work in progress...

...

More bikes and bike lanes for Tel Aviv

Fourteen years ago, Tel Aviv did not have even one bicycle path. Now the city has more than 100 kilometres of paths, trails and lanes, and bicyclists have become an integral part of the urban landscape. Some even say the rise in bicycle use has outpaced expansion of the infrastructure to handle it, but municipal officials seem to be in danger of breaking their arms patting themselves on the back.

Under Mayor Ron Huldai's direction, the city will spend about NIS 150 million in the next five years on building new bike conduits. When the five-year plan is completed, Tel Aviv should have around 150 km. of designated bicycle routes. "It's a real revolution," says the director of the municipality's Construction and Infrastructure Administration, Benny Maor, who does not shrink from comparing Tel Aviv with Dutch cities. "It's a replacement for cars - people are switching to bicycles," Maor says, adding, "It's starting to become Tel Aviv's motto." According to a 2010 municipal poll, 38 percent of Tel Aviv residents own a bicycle. A survey by the city found a 20 percent rise in the number of bike trips in the city between 2007 and 2009, followed by a leap of 30 percent from 2009 to 2011.

The last survey, Maor points out, was before the city-wide bicycle rental program Tel-O-Fun began last spring. Despite complaints about technical glitches and poor maintenance, membership numbers have surpassed expectations; in seven months, the now-familiar green bikes with the swooping metallic rack in the back have logged more than 280,000 separate rides. City officials say the usage rate is double that of similar programs abroad. In light of the roaring success and high demand the Tel Aviv-Jaffa Economic Development Authority, which runs Tel Ofan, is planning to install 50 additional stations and to purchase 500 more bicycles this year. The new bike-path plan aims to cope with the growth in ridership, to eliminate points of contact with pedestrians and motor vehicles and to create a contiguous conduit network covering the entire city. Currently, riders are often forced onto the roadway because the bike path they are on simply ends. The program also aims to encourage bicycle use in Jaffa and south Tel Aviv neighborhoods, and eventually to link the city's bike path network to those of neighboring cities.

One of the new plan's principles is to put the bike paths or lanes on street level, but separated from vehicle traffic. Maor admits that narrow streets and other exigencies can make this ideal difficult to achieve. Municipal Director General Menahem Leibe stresses that the city's investment in bike paths is part of a clearly defined policy of putting bicyclists and pedestrians first. "It can come at the expense of private cars. There's no such thing as a free lunch," Leibe said, although he adds that the ultimate goal is striking the right balance among pedestrians, bicycles and cars.

On Bloch Street, one end of which faces the municipality, dozens of parking spaces are being sacrificed for bike lanes, to the outrage of people who live or work in the area. "It's insignificant," Leibe said, promising to build more parking lots. He said it's all part of the worldview of the municipality and the man who heads it. "Our idea is for vehicles to park underground and for pedestrians and bicyclists to be on the ground. It's the right thing, especially in a city as densely populated as Tel Aviv," Leibe said. Israel Bicycle Association director Yotam Avizohar is pleased with the five-year plan, and points out that many changes were made in order to create a comprehensive network of bike paths in the city and enable riders who don't want to do battle with cars to ride. "The new plan has smarts," Avizohar said.

Source Haaretz and TLV Facebook Page

White City Residence starting to take shape

As White City Residence reaches floor 15, and as the white finish is being applied to the structure a new marketing video has now appeared.

Enjoy!

Hat tip (again) Tel Aviv Project.