One of the most basic human needs is a place to live – a home. Here in Israel,
fulfilling this need has become more and more difficult with the property market
looking much like a minefield full of hidden traps and pitfalls.
every day, the press is full of articles about the “housing crisis,” the high
cost of apartments or changes of taxation laws or mortgages – all of which seem
to make the dream of owning a home feel less than attainable.
news is that many can and do negotiate the real estate minefield and find their
dream home. In this column, we will visit some of the Israeli real estate topics
and issues from the perspective of a realtor. Obviously, there will be figures
and statistics, but I also hope to bring the human side, the questions and, yes,
some of the answers learned from my experiences as manager of one of Jerusalem’s
largest real-estate offices. Effectively, this will be your inside view from
someone “on the ground.”
Let’s start by taking a look at the market.
Israel is a small country with a growing population so, logically, the root of
the “problem” is a simple case of economics – limited supply serving a high and
increasing demand. This supply/demand gap widens when broken down into regions.
Demand in the Gush Dan or Jerusalem areas is obviously much higher than in the
North or South. This is not a new revelation, but what is probably less widely
known is that this gap is slowly, but surely, shrinking.
More and more
buyers are thinking outside the box and looking for housing options outside
their primary search areas. Many small towns and moshavim offer good options for
those who can’t find what they need at prices they can afford in the larger
cities. Coupled with this is a constantly improving, albeit far from perfect,
transportation system that makes commuting a far more realistic option than in
the past. For example, many of Binyamina’s residents work in Tel Aviv and enjoy
a 40-minute train ride to and from work – that’s less time than sitting in Gush
Dan traffic! Similarly investors are realizing that it is possible to make good
investments in cities such as Beersheba or Ashkelon as opposed to Jerusalem, Tel
Aviv and Haifa and still find good tenants who are happy to rent a property
outside the main cities.
Another major influence on the real estate
market is the plethora and increasingly complex set of property taxation laws
relating to both buyers and sellers in Israel. In general, these laws favor the
first-time or single-property buyers and those buying at the lower end of the
market and are harsher on multiple-property owners and those buying or selling
in the super-luxury market.
As with everything in Israel, real estate is
affected by the political and security climate at any point in time, as well as
statements made by experts and politicians. These statements or opinions are not
always based on fact or objective but, almost always, they create a wave of
excitement or more often panic among the various players in the market. In my
experience, these knee-jerk reactions tend to pass but what lingers is the
feeling of uncertainty and instability, which makes buyers and sellers question
themselves and their decisions. It can be surprising how many people rely on
comments and rumors rather than facts and their own common sense.
coming weeks and months, I will revisit all these issues in more depth along
with many other ideas and experiences relevant to real estate here in Israel. If
nothing else, 2014 promises to be an interesting year for those in the property
market and I invite you to come along for the ride! Raphi Bloch is the manager
of the Re/Max Vision real estate agency in Jerusalem. He previously worked for
the Finance Ministry.
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