Evolution of the real estate market 2013: Israel 9th in the World

Evolution of the real estate market 2013: Israel 9th in the  World

In Israel, 93% of the built land belong to the State of Israel, in one form or another (KKL, Minhal,..) and are leased under emphyteutic 49 or 99 years renewable. On the other hand, the properties built on this land are the object of private transactions and it is clear that real estate in Israel is doing well. No because realtors are more efficient than elsewhere or because of a simplest acquisition process but here local demand is widely challenged by the request of the Jews around the world (see our analysis in the previous issue of «Se Loger») and offer is very limited.

Indeed, according to the latest report published in the Global Property Guide, reference in terms of monitoring of the real estate market in the world, the price of apartments in Israel is increasing by 6.34% (rate corrects incorporating inflation) in the early 2013 compared to the beginning 2012, 3.12% compared with the last quarter of 2012, thus placing Israel ranked 9th worldwide real estate markets on the rise after the United Arab Emirates and their 28% increase (Dubai which) back finally after its 53% decline between 2008 and 2011), Hong Kong and its 20% progress, the United States and their 8.3% increase (the first since the collapse of the 2nd quarter of 2006), Turkey (8.13%),  Brazil (7.34%), New Zealand (7.23%) and Denmark (7%), but ahead before China (5.92%) and far ahead before Japan (2.1%), not to mention Singapore (down by 0.52%) or most of the European countries where the 13 most are grouped bad markets real estate in the world, the record being held obviously by the Greece in 11.53% decline, but where we find  Spain (down  10.24%), Germany (down  .30%) and  France (down 2.37%).

Then obviously, in Israel, some cities are more expensive than others, and Tel-Aviv and Jerusalem are among the six cities where we recorded higher price increase over the last 5 years. And yet elsewhere over the past months, this brings Jerusalem an average increase of 19.156NIS/ sqm and Tel-Aviv to 23.876NIS m2 (4.975 euros). And obviously, if you lookat  the national program of new construction planned in the next 3 years, one realizes that this is not likely to change. Indeed, there is much an important prediction of housing construction in Kiryat Gat (7523 additional units by 2015) or Beit Shemesh (4900 housings over the next 3 years) that may therefore logically lead  lower prices locally, but it is unclear how for example 1300 additional housing provided mainly around the religious neighborhoods on the outskirts of Jerusalem, including Ramot, could change the situation.

Then on the investment plan, this maintains the secure bubble and predictions are obviously reassuring, this as Israel displays always exemplary growth (3.6% expected in 2013, 3.3% posted in 2012, 4.6% in 2011) and real estate demand is on the rise. In the first quarter of 2013, even there was an increase of 34.3% in the number of transactions compared to the first quarter of 2012 (largely related to the prediction of the reform on taxes implemented early May) and the number of apartments for sale is falling by 1% from last year. But every day, you can still admire these young Israelis who continue to consider the acquisition of a principal residence as a priority after the wedding, because if compared to other countries, we can see that the purchase of an average apartment in Israel is 7.7 years of income average household while the purchase of an average apartment in the United States corresponds to 3.1 years of average household average income (5.6 years in Australia)even if obviously it is still far from the 13.5 years required for this same purpose in Hong Kong.

Then the real advice is to invest in Israel, especially in Jerusalem, to arm yourself with courage to face the procedure which looks so far from real estate acquisition abroad, to surround yourself with competent professionals and to start as soon as possible, because every day prices rise and the objective is more difficult to achieve.

 

Sources: The Marker, Yad 2, Q1 2013 Global Property Guide, Calcalist, Bureau of statistics National, Ynet, 2013 Annual Demographic International Housing Affordability Survey, Minhal Mekarkey Israel

Deborah

Jerusalem real estate

Israel Tel.: (972) 2 6786595 / France Tel: (33) 4 22 13 05 39

www.jerusalemimmobilier.com