Israel’s Prime New Real Estate

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The Israel government and the Israel Defense Forces are releasing prime real estate in central Israel for new housing.

The Director General of the Prime Minister’s Office, Harel Locker, announced on June 2, 2014, that all the major Israeli army bases in the center of the country will be vacated and the land put up for sale.

The project is designed to release capital for the defense budget and also to revitalize Israel’s peripheral areas by relocating army bases to the north and south of Israel. This major infrastructure project will also generate economic activity in the less-crowded areas of the country, while enabling 100,000 new housing units to be built in the metropolitan areas where there is high demand for homes.

At Creative Estates Israel we are excited to see new building projects on the horizon in central Tel Aviv and other prime locations which have belonged to the IDF until now. We also expect that the redistribution of army manpower will feed the demand for rental properties outside the main centers of population, helping to rebalance the property market.

If you are interested in finding out more about the latest real estate investment opportunities in Israel, give us a call or send us an email today.

Time to Raise Your Rent?

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Property owners living overseas may be losing money if they are not increasing their rents in line with the market, says Shaun Isaacson of Creative Estates Israel.

Home rental payments rose throughout Israel by an average of 1.8% between the 3rd and 4th quarters of 2013, with a 2.5% increase in the Tel Aviv area and a 2.4% increase in the Sharon area. If this trend continues, we could be looking at a 10% annual increase in rents in Israel’s most popular central areas.

Israel property owners who live overseas and manage their own properties may not be aware of Israel’s fast-moving market trends. They may be missing out on important opportunities to maximize the earning potential of their properties in Israel. For example, since the start of 2014, there have been new regulations that allow municipalities to tax the owners of empty properties.

At Creative Estates we take care of each property that we manage as if it was our own. We are always looking out for the interests of its property-owning clients, by keeping up-to-date with market trends, new development projects and changes in the law. Our experience in property investment and management is combined with our experience of Israeli law, tax and accounting requirements.

If your property manager is not advising you to raise your rents, then they are not proactively representing your interests. Call Shaun Isaacson at Creative Estates today for an in-confidence consultation to ensure that you are charging a realistic rent on your property and making the most of your Israeli real estate investment.

Managing your Israel Vacation Apartment

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Welcome to Israel?

As you open the door of your Israel vacation apartment, what will you find inside? A plague of ants in the kitchen cupboards, a broken refrigerator, a leaking pipe in the bathroom, or a local wild cat nesting with her kittens on your balcony?

When you arrive in Israel after a long journey, looking forward to a relaxing stay in your vacation apartment, you want to find everything clean, tidy and ready for your family holiday. The beds should be made up with freshly laundered linens, and you should find fresh food in the refrigerator, clean bathrooms, and no pests!

Creative Estates specializes in managing properties in Israel for their owners, and our service includes the cleaning and maintenance of holiday homes throughout the country. Whether your apartment is rented out or sitting empty, it is important that someone is keeping an eye on it for you. We enter at least twice a week to make sure that the property is secure and nothing has burst, leaked or collapsed. We take care of all the utilities and bills, and liaise with the building manager on your behalf.

In advance of your visit we will make sure that the apartment is set up for you with every detail taken care of. We will organize the receipt of deliveries – furniture and appliances or groceries – and check every light bulb and fixture to make sure you don’t find anything out of order.

Every vacation starts with peace of mind – let Creative Estates take care of your vacation apartment and make sure there are no nasty surprises awaiting you.

Who’s Buying Homes in Israel?

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A record number of homes were purchased in Israel in the fourth quarter of 2013, 29% more than the preceding quarter, and 24% of them were purchased by investors.

Home sales hit a ten-year high as investors rushed to sell unwanted properties before their capital gains tax exemption ended in December 2013. Another factor in the increase in purchases was the launch of the major new real estate development in Rosh Ha’Ayin (as we reported here).

While homebuyer purchases rose 27% in the last quarter of 2013, there are indications that home buying will have slowed in the first quarter of 2014 as many young couples are waiting to see if the government will introduce the tax breaks that they have been promising. The Ministry of Finance says that the tightening of mortgage restrictions is also causing first-time buyers to buy second-hand rather than new apartments.

While some commentators warn of an imminent fall in real estate prices, housing in Israel is expensive. The government’s continuing promises to reduce housing prices has been shown to be unreliable – they have been slow to release more land for housing development. It seems clear that the demand for housing continues to exceed supply, which will always be limited in a country as small as Israel. With an annual population growth of 1.8% and a steady influx of Olim, particularly to the main population centres, property prices are likely to remain high.

So when is the best time to buy a property in Israel? We say always!

Now or next year, whether you are planning to live in Israel sooner or later, using it for rental income or for your children, owning a home in the Holy Land is the best investment you can make!

L’Shana Haba B’Yerushalayim – Happy Pesach to everyone!

Spotlight on Rosh Ha’Ayin

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The Israeli government has signed up to build 10,700 new homes in Rosh Ha’Ayin, in addition to a new neighborhood of 5,000 homes that are already on the market. Shaun Isaacson explains why this makes Rosh Ha’Ayin particularly attractive for Israel real estate investment.

RoshHaAyin MapThe plan in Rosh Ha’Ayin is the third “blanket agreement” between all the government ministries for the rapid sale of land in high-demand areas, designed to expand the infrastructure and housing market in popular cities. The agreement guarantees developers building permits within 90 days, speeding up the construction of residential homes in areas of Israel where there is strong demand and a shortage of affordable housing. Similar projects are underway in Kiryat Gat and Modiin, with a ‘master plan’ to build 100,000 new homes in Israel over the next 2 years.

Since population growth is strong and the Israeli economy is buoyant, with low interest rates, there has been pressure on the Israeli government to increase the supply of affordable homes – this was one of the main issues raised by the summer protests in 2012. There are many individuals and couples waiting for the opportunity to move out of their parents’ homes and buy their first apartment. The Bank of Israel is committed to keeping interest rates low in order to facilitate this. While the prices of apartments are expected to fall in 2015, we believe that demand will remain strong and prices will soon return to their current levels.

In Rosh Ha’Ayin, the planned new housing projects will effectively double the population of the city, which is already attracting young families because of its excellent quality of life. It has been planned as a ‘village city’ with excellent parks and sports facilities and the Migdal Tsedek leisure and cultural center. It is located just 12 miles east of Tel Aviv, near the source of the Yarkon River, and it has become a focus for the oil and natural gas industry, with associated infrastructure and technology projects opening up job opportunities.

Under the new plan, infrastructure projects and public buildings will be built at the same time as the apartment buildings, speeding up the development of the city and creating excellent opportunities for rapid returns on investment. Since the prices of new-build projects in Israel typically increase by at least 25% in the first 5 years, there will be great opportunities to buy the new apartments being planned for Rosh Ha’Ayin as buy-to-let investments.

Comparing Average Home Prices around Israel 2008-2013Israel Home Prices Chart


Data courtesy Madlan, February 2014

Looking back, we have seen a 62% increase in average home prices in Israel since 2008, during which time prices in the Center of the country rose by 88%, in the Petach Tikva area by 82% and in Rosh Ha’Ayin by 71%. Since Petach Tikva is now developed and arguably saturated, the new plan to develop Rosh Ha’Ayin will drive prices higher as it become the most sought-after place to live.

To find out more about residential or commercial real estate projects and investment opportunities in Rosh Ha’Ayin and other fast-growing cities in central Israel, contact Creative Estates Israel today!

 

Friday Crisis Resolved

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It was every landlord’s nightmare – a pipe burst on a Friday afternoon. When the tenant called Creative Estates at 12.00 noon on Friday, we dispatched our emergency plumbing team to assess the problem.

Some Israeli plumbers would have disconnected the water and arranged to come back and fix the problem after the weekend, but our team didn’t want to leave the tenant without water. They rigged a temporary water supply pipe to circumvent the leak, restoring the water supply by 4.00pm on  Friday.

After the weekend, they came back to fix the pipe and patch up the damage. They also checked the location of the pipe and verified that fixing the problem, and the damage that had been caused, would all be covered by the insurance policy. The landlord would not be out of pocket when he found out about the broken pipe, which was only after it had already been fixed!

Creative Estates goes the extra mile to make life easier for landlords and for tenants. That’s what professional property management is all about.