“Next year in Jerusalem” is the traditional wish that the Jews of the whole world say on the New Year holiday according to the Jewish calendar. In the autumn of 2008, the visa regime with Russia was abolished, so that the next year could be found in other beautiful cities of the biblical land.
Place of power
A tiny Middle Eastern country that can be passed from end to end in a few hours, carries so many historical, religious, political and cultural associations that any text about Israel seems superficial and one-sided. Each of us has our own personal attitude towards this country. Staying “in the neutral zone” is very difficult.
Many Russians, first arrived in Israel, striking a bright oriental flavor. It does not fit with the abstract literary way that somehow formed in the tourist’s head, and often serves as a source of great frustration. The best remedy for it is the absence of stereotypes and openness to the living and immediate impression of the country. Adapting to local realities is also helped by the fact that every seventh Israeli is from the former USSR.
Around Tel Aviv
Since the people of Israel perceive the biblical commandment “be fruitful and multiply” literally, the population is growing rapidly. At the same time free land for construction is always in short supply. According to Oleg Vorobeichik, CEO of Neopolis, domestic demand for real estate provides 95% of the total demand in the country. Under these conditions, the rise in housing prices is a completely natural phenomenon.
Foreigners are actively buying property in Tel Aviv and its surroundings, which is quite justified. This is the economic and cultural center of the country, which began its growth from the old port city of Jaffa immediately after the establishment of the State of Israel. Interestingly, in the 30s. the last century in the construction of Tel Aviv actively participated architects of the famous German school “Bauhaus”, seeking to build low-cost mass housing. Now these houses are under the protection of UNESCO as the “White City” – a monument of urban planning art of the early twentieth century. But modern low-cost housing in the city is extremely small.
The most popular in the elite segment is the village of Herzliya Pituach, which is 10 minutes. drive from Tel Aviv. The village of Arsuf is even called the “city of billionaires”. The same category includes the cities of Kfar Shmaryahu and Caesarea. The latter is especially interesting to lovers of ancient history, because it was the capital of the Roman province of Judea.
Relatively close to Tel Aviv, on the Mediterranean coast are the cities of Ashdod, Netanya and Bat Yam. Real estate is much cheaper here, and the distance to Tel Aviv is no more than 30 km. Thus, housing in one of the elite complexes in Ashdod will cost $ 2.5-2.8 thousand per square meter. m. In addition, the number and variety of new buildings can satisfy different customer requests.
All experts confirm that such an indicator as the average price per square meter of real estate is not informative. However, for comparison, it can be noted that in Tel Aviv at a price of $ 3 thousand per square meter. m. you can buy an apartment in an old house near the industrial zone, and the average price in the city is about $ 4.5 thousand per square meter. In the elite areas on the coast prices can reach up to $ 10 thousand per square. m, although it is largely – a tribute to fashion and prestige. Oleg Vorobeichik believes that there is a significant variation in prices not in the cities of the country, but between the districts of the same city. His opinion is confirmed by Simon Tsipis, head of the residential real estate company RE \ HOUSE: “In Tel Aviv, due to its proximity to the sea, the price for an apartment can be $ 20-25 thousand higher than for apartments located closer to the city center “.
Israel’s champion of real estate sales in 2008, as Valery Kravitz, CEO of Cravitz Consulting, notes, was Petah Tikva: “For a long time, this city, located east of Tel Aviv, was not considered promising, but low prices and convenient location – 20-30 minutes from the center of the region – did their job. A year ago, housing there cost about $ 1.7 thousand per square. m. Now the price is about $ 2.6 thousand. ”
On the sea and in the mountains
Investors have always enjoyed great demand. Eilat is the only Israeli resort on the Red Sea. This 12-kilometer stretch of coastline is famous for its high-class hotels and a developed tourist infrastructure, as well as transport accessibility: Eilat has an international airport and a seaport. Because of the special, very dry climate, even the summer heat is easily tolerated here. And the coral reefs of the Red Sea attract numerous connoisseurs of underwater flora and fauna.
In Eilat, especially many complexes are built for sale to foreign investors. First of all, they are interested in the possibility of profitable investments. In Eilat, this contributes to everything: the limited length of the coastline, and the high year-round demand for housing. Prices per square meter in Eilat are as follows: new apartments from the developer – $ 1.8–2.5 thousand, apartments on the secondary market – $ 1.6–2.3 thousand, villas – $ 2-6 thousand, penthouses – $ 2, 5–5 thousand. The
spiritual capital of Israel is Jerusalem, one of the oldest cities in the world. Those who want to buy property here (for prestige, for religious or other reasons) are always there. Most foreigners buy expensive housing here near the historic center, near the old town. Prices for prestigious apartments start at $ 500 thousand.
The city is located on a hill, at an altitude of 650–840 m above sea level, and winters here are quite cold for the Mediterranean. Therefore, the best gift to the inhabitant of Jerusalem is hand-knitted woolen socks.
Buy to make money
Due to the high demand for housing in the country, the rental market shows activity year after year and steady profitability. Experts note that in recent years the number of transactions for the purchase of so-called “investment” apartments has significantly increased. Annual rental income depends on location and can be 3-5% in Tel Aviv, 6% in Haifa, 8% in Ber-Sheva and up to 10% in Tiberias and Kiryat Shmona. The most profitable segment of real estate investment is just standard housing. In Israel, this is the popular 4-room “hundred meters”. These apartments are bought and rented first.
The main event in the bilateral relations between Russia and Israel was the abolition of the visa regime in the fall of 2008. The Government of Israel took this step to stimulate the development of tourism. This resulted in predictable consequences for the real estate market. Stanislav Zingel, president of real estate agency Gordon Rock, said: “After the abolition of visas for Russians, Israel faced a shortage of hotels, so the most enterprising compatriots buy existing apartment hotels or hotels, reconstruct them and then rent them out. For example, in the hotel complex of the 5 * Royal Sea class in Netanya, on the seashore, you can buy apartments for as low as $ 280 thousand, with a guaranteed income of 7%. At the same time, the owner of such housing can live in it for up to 90 days a year. ” Oleg Vorobeichik notices
Simon Tsipis also confirms that Russian buyers are very interested in Israeli commercial real estate, especially since now you can find large objects on the market that can, with proper management, bring a stable income of 10-12% per annum.
“Mostly Russians are interested in real estate on the sea – in Eilat, Ashdod, Tel Aviv, Netanya, Caesarea, Herzliya Pituach. The peak of demand was in November 2008. At this time, some construction companies were selling Russians up to 60% of the housing they built. Now investors are reselling this property and are reaping the first fruits. On average, with the right investment, the Russian investor makes 18–22% of the invested amount when selling real estate. Recently it has become possible to obtain a mortgage loan for foreigners, which stimulates Russian investors quite well, ”says Valery Kravitz. Stanislav Zingel agrees with him: “According to the forecasts of our company, in 2009 more than two thousand Russians will acquire real estate in Israel .”
Ups and downs of the market
Last year was very difficult for the real estate market in Israel. Prices, which grew by 20% in the first half of 2008, stopped their growth in October, and then gradually began to decline – first of all, in the segment of expensive real estate. According to Stanislav Zingel, for apartments worth up to $ 300 thousand, they fell by 2%, and for apartments over $ 800 thousand – already by 7%. However, this did not last long: the lack of finished objects resulted in price increases. Moreover, the statistics of the first months of 2009 show that the Israeli real estate market seems to be overcoming the effects of the global crisis and may return to the pre-crisis level by August. So experts do not lose optimism.
Domestic demand for rental housing is also growing: if it is difficult to purchase real estate because of a reduction in income, Israelis will join the ranks of potential tenants. This allows the market to be maintained in a more or less stable state even in economically difficult times.
By the way,
Oleg Vorobeichik, CEO of Neopolis:
“Mortgage is extremely popular in Israel. The size of a bank loan cannot exceed 75% of the value of the object or 80–85% in case of loan insurance. The bank makes a decision on granting a loan to foreigners on the basis of documents on income and bank printouts for the last 3-6 months. Getting a mortgage loan is associated with costs – their amount is usually about 1% of the value of the apartment. It includes payment of bank office work, notices of a mortgage, a notarized power of attorney, appraisal of the value of the apartment (for apartments of the secondary market and for self-construction), as well as stamp duty.
According to the Bank of Israel, the average cost of a mortgage loan ranges from 2% to 4.5% per annum. Those who take a loan for a period of 5 to 12 years or a loan tied to the prime rate set by the Bank of Israel every month will receive the lowest percentage. A loan repaid at this rate is not tied to a price index, and it can be repaid at any time without penalty. Until full repayment of the loan, the purchased object is formally owned by the bank. ”