Hod Hasharon one of Israel’s fastest growing cities

In the year 2000 Hod Hasharon was slated to become one of the top 7 of Israel’s fastest growing cities with a then population of 36,000.In 2013 the population is an estimated 52000 with a new neighborhood called Madhan 1200 which is rapidly building 100’s of new 5 room units which are ready now and more buildings for occupancy in the next 1-5 years. As the Tel Aviv area increases its population upward with new skyscrapers and as commute by train expands and becomes more accessible, Hod Hasharon, which has land for growth appropriation is in natural proximity to the high tech and biotech centers of business in Tel Aviv, Herzliyah and Raanana. Hod Hasharon sits due west of Herzliyah off the 4 Hwy. and south of Raanana-Kfar Saba making it a highly central location to Israel’s densely populated coast.

The Aura development company has also expanded its growth with a new tender to urban renewal in an older section of Hod Hasharon which will transform 4 buildings containing 56 in the central Ramatayim neighborhood which will create in its place 200 new units in six 24-story towers.

New city, Harish, under development in North

The small community of Harish has recently appeared more distinctly on the map as housing fairgoers have seen garden apartments and duplexes being offered by builders at what seems bargain prices for Israel. On questioning, sales reps will tell you that this building project is in Harish, and hand you a boldly marked map since you likely don’t know where it is.

Harish was built in the 1990’s with the infrastructure and intent to prepare for a new city on the scale of Modi’in but a number factors put it on hold. Now the government has announced the full speed go ahead to build a new city.

According to Israel National News, the north-central Israeli community of Harish will be converted into a full-fledged city, Prime Minister Binyamin Netanyahu’s Cabinet voted Sunday, appropriating the project a 1 billion shekel budget.

Harish is accessible off of the toll Highway 6 to the North and is located 50 minutes northeast of Tel Aviv, 35 minutes from Haifa and 15 minutes from Hadera.

Harish is now a community of 300 households – but approximately 9,000 housing units are in stages of construction, having been sold on paper via builders in the last few years.

“About 2,000 additional housing units will be marketed as part of the ‘affordable housing’ campaign. In the first stage about 12,000 housing units will be built and in the following stages this will be expanded to approximately 24,000 units.”

In a statement to the Israeli Cabinet Netanyahu said, “A new city has not been established in many years,” he continued. “This will be a new city along the lines of Modi’in; it will be the beginnings of a city of 50,000 people. I believe that it will grow far beyond this in the future.”

Azrieli Group to build 4th building and green park

Tel Aviv’s landmark Azrieli towers

Azrieli Group will build a new green park near the site of its Tel Aviv landmark 3 buildings, the square, triangular and circular tower. Work is beginning on the fourth elliptical tower. The elliptical tower will also contain hundreds of housing units in its 80 floors.
The new tower will be on the site of the former Yediot Aharonot building (where I once worked) where the neighboring area will also be reclaimed with other new projects.
There is also a projected ‘green park’ and which Azrieli will build in exchange for the tower complex which will cover a section of the Ayalon Highway to create an urban park. The portion of the Ayalon freeway which is slated to be covered with a dome is bordered by Yitzhak Sadeh Street in the south and Arlozorov Street in the north. It will comprise about 15 dunams.
The new park area will be encompassed by dozens of new towers and will include cafes and sports complexes will likely be built in the park. The inspiration for the establishment of a green park over the Ayalon came to the steering committee from similar projects abroad such as Park Avenue, the High Line Park in New York, Miami Beach Park, the Big Dig project in Boston and the London highway covering project.

Beer Sheva to experience the next boom

Not long ago I posted a blog entry about the IDF selling land in central Tel Aviv, Hakirya district, to help finance the major move of all their operations to the Negev, Beer Sheva in particular.

Now according to Haaretz, Beer Sheva is set to be the site of a new high tech boom. Not long ago Benjamin Netanyahu promised that Be’er Sheva was destined to become “the cybercenter of the Western hemisphere.” One thing I learned from statements about development by the Israeli government is that if the government is supporting it, it will happen. Modiin and Rishon Lezion were slated nearly 20 years ago to become the largest and fastest growing new cities in Israel and now Modiin has become a highly desired location with real estate prices approaching a median of 1,600,000 for a standard 4 room apartment.

With the creation and expansion of a new high tech park there some software and cybersecurity giants have invested in Beer Sheva companies. Paypal recently announced in March it was buying the Israeli startup CyActive, a cyber security company out of Beer Sheva and entered Nasdaq last September.

Companies in the park include foreign and local firms such as Deutsche Telecom, RAD, Lockheed Martin, Ness technologies, Elbit Systems and EMC. The National Cyber Bureau, an agency created for the purpose of cyber security will also be housed there in a few months.

The biggest problem will be housing for expected newcomers. Housing starts were down last year, land has been released by the government for building. Pent up demand will force prices of existing housing up and with the cities new growth via high-tech and the army moving its operations there,  a boom can be safely predicted.

photo of Beer Sheva road

French Immigrant Housing Trends

coastal housing

The tally of Jews immigrating to Israel from France has grown to nearly 7000 with over one thousand arriving last month. It is believed that terror attacks against the Kosher Market last January and threats against those protecting Jewish sites as well as mass desecrations of Jewish graves have brought many French to the decision of purchasing a home in Israel.

Buying trends for the French immigrants show that they are still buying in what was one of the strongest earlier French communities, Netanyah. Growth in the area of Ashdod, although quieted last summer due to thousands of rocket attacks near or adjacent to the city has not resulted in a real estate losses. In spite of the recent war Ashdod is growing strongly and steadily as prices increase there over 25% in the last two years.

According to an Advocate for a local law firm specializing in French language customers and reported on in Globes the French are buying homes to rent until they make the move, even buying “flips” older properties to renovate and resell. Many are also buying businesses here, “Clients that came to me were very interested in food, mainly fast food – hamburgers, pizzas, as well as cafes and patisseries. They’re bringing the knowhow here from Paris in the field of baking and food and that gives them a relative advantage over Israeli businesses.”

Communities along the seacoast are experiencing the highest level of growth from French purchasers, from Ashdod to Hadera. Jerusalem attracts a more religious French population who are attracted to the neighborhoods of Bakaa and Mekor Haim where there are French synagogues.

French Bakery in Tel Aviv

Tel Aviv moves out of Top 20 most expensive cities in 2013

Tel Aviv has dropped out of the top 20 of most expensive world cities, according to Business Insider. After 2011, the rankings for the most expensive cities in the world were in and Tel Aviv was 19. Their estimates are based on those living in the city, not travelers coming in. Oslo ranked 1 on most lists, a few others named Tokyo. In 2012 it was Moscow.

Not that it has become much cheaper to live in Tel Aviv, but factors influencing the ranking could have pushed other cities ahead. Tel Aviv is still more expensive than Manhattan which is the highest US city ranked at #43 in the world.

Cost of living is based on several factors, affordability of housing in relationship to average incomes, cost of basic food items, a fast-food meal, costs of daily goods, services and public transportation.

In relationship to the cost of housing, statements coming out of business and government leaders and real estate professionals in Tel Aviv are at odds as to whether there is a bubble or not. At a recent Dun-Bradstreet forum all the economic experts except one, stated there was a bubble, that prices in Tel Aviv are 20% above the affordability index.
According to the Israeli business magazine ‘Globes’, Real Estate Appraisers Association in Israel chairman Ohad Danus. “Prices have risen because of building costs, VAT; developers’ profits are falling, and most of the rise is because of land, which is almost entirely sold by the government, which is the main beneficiary of the rising prices. Israel has failed in the past few years in creating supply in high demand areas which could stem the rise in prices.”

Outside investors, such as a British couple I helped purchase housing here, saw large Israeli cities as an investment they could afford, and simply chose to continue renting and working in London, the price of purchase being out of their reach there.

Tel Aviv still remains highly attractive, with its beaches, urban sophistication and ease of transport and atmosphere of freedom and social life. Young couples are choosing to buy outside and commute, or purchase an investment outside of Tel Aviv and rent in the city.

Two Scandinavian Banks Boycott, threaten Israeli Banks

According to the popular Walla Hebrew news site the Swedish Nordea Bank, which is the largest bank in Scandinavia, and the Norwegian Danske Bank, have announced that they will boycott Bank Hapoalim for funding projects in what they call “occupied territory”.

The Nordea Bank also demanded that Bank Mizrahi Tefahot and Bank Leumi immediately make public their financing operations over the green line. The most familiar areas where building continues to be financed and flourish are the formerly outside the green line Jerusalem neighborhoods of Arnona, Pisgat Zeev, and Har Homa.

The action taken by the banks is the first bank to bank boycott. An Israeli authority highlighted that these are not decisions by the governments of Denmark and Sweden, but of private companies, making it impossible to for Israeli political leaders to protest.

Billboard for Bank Tefahot In Arnona, Jerusalem

Jerusalem Periphery – Needed Expansion, Prices rise

On the heels of one of the Kerry visits controversy stirred around the dual announcement that 1400 new housing units would be released for building, 700 of which would be in East Jerusalem. At the same time came the announcement that as a gesture towards peace, 26 convicted terrorists would be released from Israeli prisons.

The majority of the homes, will be built in established Jerusalem neighborhoods, 387 of them in the Ramat Shlomo, and 311 in Gilo. Last summer there were already tenders given for building in Har Homa, 400 units in Ramat Givaat Zeev, and Gilo.

Prices have been consistently climbing in Jerusalem to the point where a softening had come due to high prices and the existing market in Jerusalem not offering what families are looking for in their budgets, parking garages, balconies and a minimum of 3 bedrooms. Thus surprisingly areas that had seen a decline in prices and buyers, such as Maale Adumim, Givat Zeev and the peripheral neighborhoods of Jerusalem, Pisgat Zeev and Har Homa are seeing a 10-15% gain in the last year.

To put it simply, a four-room apartment in Maaleh Adimim that would have sold for 1,190,000 last spring is now closing at 1,250,000 to 1,300,000.

Dubious Honor

Israel was recently revealed in a Goldman Sachs study released in the beginning of November to have the dubious honor of being the nation that has seen the highest jump in real estate prices. Prices have soared 40% since 2009 and 72% since 2007. Israel is followed by the nations of Norway and Switzerland that have seen significant rises in the costs of housing but income to housing ratio is more affordable than Israel’s that has seen the greatest gains.

The pent up demand for housing after the slow years of the intifada created a demand for housing that remains unmet. In 2010 the Israeli government took steps that took effect in 2011 hoping to suppress what it too late perceived as a “housing bubble”. The Bank of Israel put into effect down payments restrictions to 40% down minimum and tried to release those holding on to investment apartments by lightening taxes on their sales in hopes of suppressing buyers while releasing more inventory into the market place.

Prices have come down as a result of these actions, but almost as much from the perceptions of buyers that now would not be the “time to buy” in expectation of prices coming down. coinciding with these hopeful perceptions of prices coming down, sellers are still anticipating the expected gains in their prices so that only the desperate who must sell are willing to lower their prices to meet the current market.

New housing coming into the market finds little competition with existing with prices just as high while offering more amenities such as elevators and underground parking but have shrinking rooms for the net meter amounts.

Real Estate pruchases drop in Jerusalem and Tel Aviv, Haifa enjoys growth

Haifa is enjoying an increase in housing sales and prices while the other two major cities of Israel, Tel Aviv and Jerusalem are still seeing falling transactions and softening prices. The high tech industry overall in Israel is experiencing a 2.8% gain which could be reflective of the moving trend towards Haifa, one of the countries high-tech centers.

The second quarter in Haifa was marked by a 8% increase in housing prices while Jerusalem and Tel Aviv saw 2-1% drops according to the interdisciplinary center in Herzliyah.

The Finance Ministry “red lights” reports a nearly 15% drop in sales transactions in Jerusalem since a year ago in the traditionally active real estate months of July and August. Overall figures for real estate transactions countrywide can be deceptive as Haifa and Beersheva have regulated the overall statistics with positive numbers.

Treasury economists report the over all economic numbers for unemployment and consumer confidence are stable. The most significant drop in real estate purchasers are young couples and first time buyers who dropped by 30% since last year. It is this author’s contention that high prices, high down payments and sellers unwilling to accept reality and lower prices are the cause for the drop in ready and available buyers.