Is­raeli house prices rise by one quar­ter

The Jewish Chronicle - - World News - BY SI­MON GRIVER JERUSALEM

THE PRICE of Is­raeli homes has risen by 24 per cent over the past two years, ac­cord­ing to a Bank of Is­rael (BOI) sur­vey.

In re­cent months price rises have ac­cel­er­ated, with the value of the av­er­age home ris­ing by an an­nu­alised rate of 15 per cent in Au­gust, ac­cord­ing to the Cen­tral Bureau of Statis­tics.

For over­seas buy­ers, ac­cord­ing to Ad­ina Ha­ham, CEO of Is­rael’s An­gloSaxon real es­tate chain, price rises have been even sharper: “In re­cent years the Is­raeli real es­tate mar­ket has started bas­ing prices on shekels rather than dol­lars. The strong shekel means for­eign buy­ers are pay­ing a lot more.”

Since 2007, the pound has de­pre­ci­ated by over 25 per cent against the shekel, so the price of Is­raeli homes has risen by 50 per cent in ster­ling. Is­raeli homes tre­bled in price be­tween 1983 and 1997, and were then flat for a decade.

The BOI cred­ited the de­mand to the re­ces­sion. With very low in­ter­est from banks on de­posits and mortgages, and fears about volatile stock mar­kets, Is­raelis are in­vest­ing in sec­ond homes. A sur­vey by as­ses­sor Levi Itzhak found that 50 per cent of Is­raeli homes be­ing pur­chased are for in­vest­ment.

“I can be­lieve that fig­ure from what we see,” said Ms Ha­ham. “Most of th­ese homes are rel­a­tively in­ex­pen­sive and in ar­eas not so pop­u­lar with English­s­peak­ing buy­ers. Even so, prices in Jerusalem, Ne­tanya, Ra’anana, Modi’in and else­where that are sought by Brit- ish buy­ers have risen by the av­er­age be­cause in th­ese lo­ca­tions there is high de­mand and lit­tle land avail­able.”

Dwin­dling land re­sources are an­other fac­tor, ac­cord­ing to the BOI. How­ever, at the high end of the mar­ket, prices are fall­ing.

“The re­ces­sion means the wealth­i­est have less money to spend,” said Ms Ha­ham. “We have very ex­pen­sive homes in Jerusalem’s Ger­man Colony and Her­zliyah Pi­tu­ach where we have low­ered prices.”

De­fence Min­is­ter Ehud Barak, for ex­am­ple, last year put his five-room apart­ment in Tel Aviv’s Akirov Tow­ers, which he bought for $2.5 mil­lion in 2003, on the mar­ket for $11 mil­lion. With no buy­ers in sight, Mr Barak has cut the ask­ing price to $8 mil­lion.

Eigh­teen months ago the av­er­age home in an ex­pen­sive Jerusalem neigh­bour­hood sold nine days af­ter go­ing on the mar­ket. To­day it takes 33 days.

Less ex­pen­sive homes, how­ever, are be­ing snapped up ever more swiftly. Mr Yitzhak found that the av­er­age home in Jerusalem is sold 23 days af­ter com­ing on the mar­ket, 17 days in North Tel Aviv, 29 days in Ra’anana, and 27 days in Modi’in.

Ms Ha­ham agreed with the BOI that house prices will con­tinue to rise in 2010 but at a much slower pace.

Build­ing in Beer Sheva: house prices are up by 25 per cent in two years

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