1

The outlook
for realestate
By Alfred Cohen
' he real 2012 estate market is entering with

210
down, taper
i iutwill continueto fall n20127 Government they

the is despite factthatthe government increasing the thatare curbing regulations making mortgages limits thesize the more expensive placing and on of

certain degree of

In uncertainty.

,1102the saleof building and the Bank of Israel s land i

risein prices, demand both

afterthree years of strong demand and and prices stalled.

sure.
can

ninisters hope will, they

iut Bernard Raskin,regiona owner

this trend will continue into Many believe butothers are not so

,2102mortgages.
to Accordingthe CBS, in 2010
some

of RE/MAX

srael, thinks differently,

000,93 new

To betterunderstand what

be

i expectedn

householdscame

into existence. This includes

'Prices n the second half 201 i of

steadied,ut b

and the home. newlyweds singles leaving parental sss than in ,0102they but will rise more than in and by overseas buyers 10!",1 says. he Ofer Feldman, VP of the Canada an This .000,3 properties derelict, additional gone Bureau of Statistics the (CBS)in Israel, average srael real is Group, leading estate developer, In 201 totals approximately .000,14 the number of real estate rose byupward 40 percent of price The nuch more optimistic. company specializes of housing 000,04 startsamounted to more than the four during past years, residential building high-end high-rise buildings not enough satisfy demand and to mop up to rise prices in inthe threeyearsprevious to The hefty Prime tower in Zameret TelAviv, such as the the the excess demand that had piled during up 201 was one ofthe reasons forthesocial willsee rise in prices in 'ark.He believes we protests decade, previous because the price real of estate made buying an .210! the "During pastthree months, we have 102-0002 ,0 t starts Italso Duringhe yearsof housing een an increase demand. And since in demand for apartment nearly impossible. explains why or an 496,13 on amounted to 249,613 annual down real the government so keen to bring is and supply islimited eaiestate inTel Avivis strong shortfall of 850,39 estate prices, became as it hot political issue. average, 0-year dwellings. recause of an acute shortage building it of land, are These figures explainhy prices w rising tands to reason thatprices ncrease, he says. will Real estate prices the reach have risen beyond constantly. the of many because during past threeyearsthe one who predicts that :eldman is not the only ,0102 rose by .%41 In 201 ,1 rose In increasein prices the risein average prices they jriceswill rise. outpaced %1.5 to salaries. In ,0102 estate prices by rose prices by according the end-of-year average real of ehuda Rahamim, VP Marketing the Yehuda ,%4 whilesalaries by little rose over .%3 published CBS. bythe iahamim which
to According

,2102 we will take lookback at2011 and before.

lelieve will they risein

.2102 will rise much They

figures published the Central by

To thisisadded demand

One of the reasons

forthe sharp in prices rise was

In 201

stabilized more real estate prices

or

less.

that supply farshortof demand. fell been

one

of the main

rose byapproximatelyin the first %7 halfof has They Supply ,1102 but during thesecond half rises of price started problems the industry

Development Company, in Jerusalem,isof similar in building ;pecializes nind. Demand forreal estate ispicking can up. ell from my our own experience the state that you

Canada Courtesy

Prime residential tower hi jH Group

/
different of the market since November istotally from the state of the market in the first months of
are .1102 Buyers activeonce

more,

and the

increaseddemand
prices

willhave

an

on upwardeffect

that Most realestate operators and experts xpect e

in willrise prices

i .2102 may stalln the first They

in the

but momentum quarter willstart gaining next threequarters,

Asaf Aviv, CEO

of Mordechai Aviv Construction

thinks that prices will rise in 2012 Industries, because of an increase in both demand and
construction costs.

abnormally developed demand for housing process where the natural did not surface, and the demand for housing And, contractedlike one down pushes spring. will like spring, spring later,he says it up
was

Demand forhousing 2011 during

low.Consequently, canned demand

--

"In contrast, supply not set to increase. The is does workers to meet industry not have sufficient demand. Furthermore, believe that the expected

the shortagelabor of will drive the cost of labor, up which

means

Zichron Yaacov,

Rosh

Yavne, Hod Ha'ayin,

thatthe

i is f leewayor fall n prices

nonexistent, saysAviv.

Hasharon and Netanya. hey are all relatively T near TelAviv,and the upgraded and railway road
Aviv. network makes it easier get work inTel to to We

The canned demand appears to be opening up. Demand for realestate in December rose to NIS
12.3 billion, increaseof an November, and of
to %71compared to %7.53 compared October.

identified trend some this

the reason

why we

years ago which is initiated large building projects

in Zichron Yaacov, Ashkelon, Beer Yaacov and

more.

YitzhakLevi, general manager of the Ambassador

real estate agency in Jerusalem, thinks that demand in 2012 will be higher than expected because
he

In my

demand opinion

for realestate in
we

willincreaseand these places

intend to have

the means

to supply demand this

Modi'in is case in point thisnew in Located relatively improving midway ithas between TelAviv and Jerusalem, economic situation risis the US and in the UK, c in of approximately 000,08 to population compared the latter which is not of member of the euro 000,04 five will yearsago. Gurthergrowth increase willincrease. residents "The
zone,

believes demand

from

overseas

may increasedemand from that quarter. Demand from Western Europe alsoset to rise or is f increase Economic crises usually and minorities, antitoward antagonism

its size to

to 000,002

.000,052

different reasons. the

At these times an average three-room apartment meter apartment in Modi'in costs 75-square

Semitism isexpected rise, he says.That iswhy to are for many Jews from France, example, seeking footholdin Israel. The

between NIS
room

millionnd NIS a

2.million. fourcosts between

of apartment over 90 sq. m.

4.million and NIS

prices increased demand expected this may rise year. in 2012 without rise corresponding in supply The same holds true for the neighborhood Ir of continueto up. real prices If estate prices may drive lessthan 25-minute drive risein ,2102 increase it will the trend to purchase Yamim in Netanya, for secondin areas property the peripheral of the country, from Tel Aviv.The average price 2.2 millionif where prices less are Realestate prices hand four-room apartment is NIS expensive. in ithas sea view and islocatedon floor in certain partsof Israel reached have already high low floor the building. An apartment on with no levels, unacceptable
'

NIS

6.million. And the

Aviv metropolitan forexample rices Inthe Tel area p

view of the sea

room

can

cost NIS

8.1 million. ew fourN

have probably reachedtheir full Despite potential.

that most experts t the fact believehatthe average real estate prices increase n will i ,2102 it doubtful is
in whether pricesTel Avivwill ise r because veryfew

on apartments

low floor offered NIS are for

89. million. in Yamim have doubledinthe Prices Ir

five will but itisdoubtful whether they past years,

to continue to rise these levels. its at But proximity

so prices,any prospective can affordtoday's buyers in201 .2 The increasewill t the placehem beyond pale. only area Prices These segmentof the TelAviv metropolitan thatmay may alsorisein Beersheba and Haifa, risein prices the luxury is towns. and expensive are university Rental demand ishigh, experience the real estate market.Overseas buyers real estate prices still are low. The purchase may drive price of real for an average four-room,90-sq apartment m. is prices luxury estate upwards. NIS ,000,074 NIS ,005,2 and itrents for monthly Dorit Sadan Marketing Manager of Shikun

TelAviv will increaseprices %5 to by probably

%7

Ovdim
over

developmentompany that buildsall c

an

annual yield of

the country alsobelieves hat prices rise t will

m. costs 60-sq apartment NIS

An average thee-room, .%5.6 rents ,000,073 and it

NIS ,000,2 annual yield alsoan of the during year becausedemand outstrips supply. for monthly .%5.6 She further dded, "The high a in pricesthe TelAviv area are increasing demand and pushing prices The same holds up 000,053 twotrue for Haifa. NIS inperipheral areas, room in NIS ,009, w bring monthly apartmentill an annual yield of %5.6 This includes Karkur, Beer Yaacov, Ashkelon