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The affordable housing initiative would be specifically aimed at persuading young families to purchase property in Jerusalem.  Eligibility will be limited to those who are 41 years old or younger, employed and who do not own additional property in the city.

The initiative, which is set to be deliberated on by the city council and members of the local planning and construction committee later this week, has been dubbed “20:20:20,” as it would require future construction projects of more than 20 housing units to designate at least 20 percent of those units to be sold for 20% lower than the market value.

Source: Jpost.com

The new site can be found at www.buypropertyinisrael.com .

If you have questions about either site, contact Lyle Plocher at lyle@buypropertyinisrael.com

Haifa prices fell by 2% on average.  That city, however, still holds the prize for the biggest gains in housing prices over the past two years: 40%.

Prices in Be’er Sheva, known as a haven for investors, were almost unchanged.

The largest price increases, year to date,  have come in some unlikely places, such as Ramle, Lod and Tiberias, where prices have risen 11 to 14%.  Also, experiencing large price increases, was the Haifa suburb of Kiryat Bialik, with an average increase of 10.5% in the year to date.  Prices in Herzliya climbed 9%, while Kiryat Motzkin, Rehovot, Holon and Ramat Gan all recorded increases of 7.6%.

Rents in most major cities in the center of the country have climbed 3%-6% since the start of 2010.

Rents in May fell in half the cities surveyed, including Tel Aviv and Rishon Letzion, but not by much in most cases. The average rent for a 3-room apartment in Tel Aviv last month was NIS 4,437 per month. That’s 2% less than in April but nevertheless slightly more than in January.

In Be’er Sheva, which has been considered prime for buying rental properties as an investment, rents rose 6% since January, to NIS 2,101 a month.

Source: Haaretz article by Arik Mirovsky

The project in Petah Tikva will have 523 apartments in eight high-rises of 14 to 24 floors each, built around an eight dunam (two-acre) park.  Occupancy is due to begin in 2013.  The asking price for a four-room apartment is NIS 1.38 million, and the asking price for a five-room apartment is NIS 1.57 million and up.

Source: Globes Online

According to Globes online, Africa-Israel Residences CEO Gili Dekel said, “This is a unique project adapted to the urban renewal of south Tel Aviv, an area of arts and authenticity, which will be incorporated in the project. Contemporary Florentin brings to mind what happened in East Berlin, New York’s Meatpacking District, or Paris’s Marais Quarter.  It has every potential to become the next hotspot that combines the old and the new, commerce, art galleries, and old workshops, cafes and bars.  Most of all, it has a young population who moved there in belief of its potential and growth.”

Source: Globes online

The Bank of Israel took the marketplace by shock when the Supervisor of Banks, Rony Hizkiyahu, proposed increasing the cost of mortgages to all home buyers who borrow more than 60% of the home’s value, in order to cool down the real estate market after years of steadily climbing home prices.  Technically, the new requirement, will be that Banks set aside additional reserves of .075% of the total mortgage when the loan to value is over 60%.  But by the nature of the business that additional cost, will end up getting passed on to the borrower.

The central bank obviously wants to ensure the stability of Israel’s banks.  The more banks lend, the more at risk they are.  The situation has been that property prices have been constantly climbing, and meanwhile, the banks happily lend 70% of the price of homes to buyers.  But if the state of the market reverses and home prices start to fall, and loans start to sour, and the banks find themselves unable to sell the properties for the prices the buyers paid,  they could be vulnerable.

People buying apartments for investment purposes comprise 30% of the market, and that’s where the Bank of Israel should be cracking down, Attias said. “It shouldn’t make life harder for the other 70% of buyers, who are acquiring their first home”.

Source: Haaretz

Stanley Fischer - Bank Of Israel

The Bank of Israel announced a plan that will require Banks to set aside a reserve of 0.75% of the outstanding value of a mortgage, anytime the Bank lends more than 60% of the value of the property the borrower is acquiring.

This new requirement will most likely discourage banks from agreeing to lend home buyers more than 60% of the value of a property. The banks would demand that the buyer pay 40% of the property price out of pocket. At present, the banks routinely lend up to 70% of the asset value, and sometimes even more.

A bank may still agree to lend more than 60% of the value of the property, but then it would have to set aside more capital to secure the loan. By the nature of the business, the banks will roll that extra cost onto home buyers by charging a higher rate of interest.

Israel’s banks are hardly “subprime lenders,” meaning they do not habitually extend home loans to dubious borrowers. But officials at the Bank of Israel, led by Governor Stanley Fischer, have been deeply concerned that a real-estate bubble is developing in Israel.

The 2025 plan calls for high-rises to be concentrated east of Ibn Gvirol Street and closer to Highway 20.   According to the new plan, no more towers will be built between the seashore and Ibn Gvirol Street, or between the Yarkon River in the north and Eilat Street in the south.

According to Yedioth Ahronoth’s “Mamon” financial paper, Doron Sapir, chairman of the local Planning and Construction Committee,  said “”The Assuta building project on Jabotinsky Street will be the last of its kind.  The city center must not be cut off by towers, but they should be concentrated along main marginal routes.  The plan is to expand the preserved area in the center of the city.  All towers in these regions will not be approved, despite the dozens of plans that are presented to us.”

Source: YnetNews

This latest data contradicts forecasts made last year by Minister of Housing and Construction Ariel Atias that home price rises would level off and maybe even decline slightly in 2010.

The average price of a four-room apartment in Tel Aviv rose 30% to NIS 2.26 million in the first quarter from NIS 1.78 million in the corresponding quarter in 2009.  The average price of a four-room apartment in Jerusalem rose 16% to NIS 1.54 million from NIS 1.32 million; the average price rose 18% in Herzliya to NIS 1.65 million from NIS 1.4 million and the average price rose 21% in Haifa to NIS 909,000 from NIS 763,000.

According to the Chief Appraiser, the most influential factor causing prices to rise is the low inventory of unsold “new” apartments.

Source: Globes Online