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.
hodhasharon tower

Advertisements

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

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.

French Immigrant Housing Trends

coastal housing

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

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. IMG_8713telavivfeb2014 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.

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.
revadim 033
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.

80 story Tower in Tel Aviv to be city’s tallest served by new underground metro

Several months ago the transaction of the large parcel IDF (Israeli Defense Forces) owned land was sold for development for housing to help relieve the housing shortage in the Israel’s largest and fastest growing city, Tel Aviv.

Plans have been released for the 2 new 80 story towers which will be in the central location on the corner of Shaul Hamelech and Weisman streets. The complex will include the office towers and three other apartment towers which will provide 770 new housing units. The new complex is affectionately known as the “toblerone tower” for its triangular shape and resemblance to the famous Swiss candy bar. The project itself is called the “Rockefeller of the Unstoppable (or city that doesn’t sleep) City”. The units will be small, two and three room apartments all measuring 65 and 83 meters.

The eight acre parcel will also includes park areas and bike paths as well as underground parking. The new project will also be serviced by a planned underground tube which is known as the “green line”. The metro will run on the Ibn Gvirol route.

Tel Aviv, along with Ramat Gan and Bat Yam continues rapid growth becoming as I have coined it, the Singapore of the Middle East in the “start-up nation”.

Ashton Kutcher property hunting in Israel

Café on Tel Aviv's Rothschild Blvd.

Café on Tel Aviv’s Rothschild Blvd.

Ashton Kutcher, who is a serious Tora student, according to co-star from “No Strings Attached” Natalie Portman, was not in Israel for religious study recently, but is looking into investing in property on Tel Aviv’s Rothschild Blvd.

The actor is business partner with Guy Oseary, a producer in the US music industry who have invested together in a number of social media companies. The partners looked into the project at 22 Rothschild Blvd which is slated to rent for $35-41 a sq. meter. They are seeking a location for an office locally from which to run a center in Israel for high tech start-ups focusing on social media.

Kutcher has expanded his personal fortune with early investments in social media start-ups, including Twitter. He also heavily invested in Yoav Shoham’s Katango, Israeli professor at Stanford University, which was sold to Google for tens of millions of dollars about two years ago.

Young Couples/Adults are Waiting out markets

thinker.
A decline in apartments sold was felt all over the country in the first quarter with a 15% drop in sold apartments from the last quarter of 2012 to the first quarter of 2013 according to the Central Bureau of Statistics. Statistics reflect Hadera to Beer Sheva, where there was a 27% drop. This statistic differs from my April 23rd post which also included housing starts bringing that figure to 20% from the prior quarter.

Most affected by the current real estate market are young couples and young adults where sellers still hold on to high rental prices as well asking prices for sales. The young demographic is choosing to remain at home, living with parents. High real estate prices and the austerity measure of 40% down payment required by the bank of Israel are the main cause.

In Israel unemployment levels are healthy at about 4.5% but the basic salaries for those entering the job market are hindering affordability to young people. Young adults and parents here  are choosing to wait out the trend downward hoping for lower prices as well as a change in government policy making housing more accessible and affordable. Traditionally parents in Israel will help their children to purchase, but wary parents are also looking for a decline in prices and required downpayments.

A similar situation can be found in the United States but has been created for different reasons, housing and rental prices are still affordable in most major US cities but the lack of even minimum wage jobs is causing a staggering 85% of college grads with bachelor’s degrees to return home to live with parents according to Time Magazine study.  Of these grads 54%  are unable to find work and instead move on to higher degree education hoping to be in a better position while waiting for economic recovery.