New Buyers Gain Grants
The Ministry of Housing announced that it will transfer Development Grants
offered to new home buyers in National Preference Areas directly to the
home buyers.
The grants, amounting to NIS 20,000 in addition to housing
assistance and subsidized mortgages, will be given to home buyers in Beer
Sheva, Migdal Haemek, Nazareth, Acre and Bet Shemesh
Tel Aviv to Increase Housing Subsidies
The Tel Aviv municipality announced that it is increasing its subsidies for
housing renovation by an average of 50%.
To date the city contributed NIS 9,000 per apartment in all areas of the city; the new subsidies will be NIS 15,000 in the southern quarters of the city and NIS 12,000 in the wealthier northern quarters.
The average cost of renovating a building with 12 apartments is estimated at NIS 25,000 per apartment. The city projects that 500 buildings will be renovated in 1998
Tax Exemption Under Fire
Income Tax Commissioner Doron Levy supports the termination of the tax
exemptions currently available on capital gains from the sale of
residential housing units and on rental income.
Levy characterized these exemptions as regressive and favoring the wealthy sectors of Israeli society. The exemptions cost the State Treasury an estimated NIS 600 Million each year, with NIS 500 Million in capital gains exemptions and NIS
100 Million in rental income exemptions.
Levy also disclosed that tax revenues from real estate purchase taxes and capital appreciation taxes in 1997 declined by NIS 800 Million or 30% from the previous year.
Study Predicts Up to 50% increase in Property Values
A recent study predicts dramatic price increases for housing in the cities located near the new Trans-Israel Highway, such as Kfar Saba, the northern Lev Hasharon communities and Rehovot.
The study projects real price increases (adjusted for inflation) of 15%-25% in the Lev Hasharon areas, with up to 50% real increases in Gush Tel Mond undeveloped land values; 20% real increases in Kfar Saba housing prices; 25% real increases in Rehovot housing prices and 38% real increases in the value of undeveloped land in Rehovot.
The international tender for the 90 kilometer central section of the highway, between Gedera in the southern Coastal Plain region and Hadera in the northern Sharon region is nearing completion. The Trans-Israel Highway Company predicts that this section will be completed within 5 years.
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Housing Prices:
During 1997, housing prices in most regions fell 5% to 15% in real terms during the 12 month period.
Housing Starts
The Ministry of Housing reported an estimated 45,000 residential housing starts in 1997, down 15% from 1996.
The Ministry set a target of 48,000-50,000 housing starts for 1998, and announced
it will coordinate with the Israel Lands Administration to market land for approximately 60,000 housing units in 1998, in order to avoid a future housing shortage and price squeeze.
Land Tenders
The Israel Lands Administration reported that land for 29,000 housing units
was actually acquired from it by developers in 1997, an amount equal to
only 60% of the government's stated target.
Land tenders for an additional 13,000 units are in the process of being prepared and land tenders for 3,000 units were cancelled due to lack of buyers.
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Builders Predict Investment Decline in 1998
The Israel Builders Association Annual Survey projects that aggregate investment in the building industry will decline by NIS 3 Billion in 1998 to NIS 37 Billion.
Residential housing starts in 1998 are projected to decline to 40,000 from an estimated
level of 45,000 housing starts in 1997.
Bureau of Statistics Reports
The Israel Central Bureau of Statistics reported that 67.5% of the Jewish
population and 27.6% of the Arab population live in a housing density of
one person or less per room.
The average density for Jewish residents is 0.97 persons/room down from 1.07 ten years ago; for Arab residents it is now 1.62 persons/room down from
2.04 ten years ago; for new immigrants arrived in Israel since 1990 the
density is 1.10 persons/room.
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See also the directory of companies providing real estate services in, and general real estate information of Israel.
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