Business in Brief: November 12

Mortgage interest rates hit historic low; hi-tech exports lose steam; huge new hotel planned for Tel Aviv

November 11, 2010 22:47
2 minute read.
BOI Governer Stanley Fischer.

stanley fischer 58. (photo credit: Louise Green)


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Mortgage interest rates hit historic low

The average mortgage interest rate fell to a historic low of 2.18 percent in October from 2.2% in September, the Bank of Israel reported Thursday. The central bank’s new guidelines on mortgage terms, aimed at raising mortgage costs, will come into effect shortly.

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The average mortgage interest rate was 3.53% in August 2009, when the Bank of Israel began to raise the base interest rate. Bank of Israel Governor Stanley Fischer has raised the interest rate 150 basis points from 0.5% to the current 2%. However, the interest-rate hikes are not yet reflected in mortgage interest rates.

The average interest rate on Consumer Price Indexlinked five-year mortgages fell to 2.02% in October from 2.06% in September, and the average interest rate on 17- 20-year mortgages fell to 2.91% from 2.94%. However, the average interest rate on 12- 15-year mortgages rose to 2.53% in October from 2.48% in September.

Hi-tech exports lose steam 

Israeli exports are on a clear downward trend, according to international trade figures released by the Central Bureau of Statistics Thursday. Industrial exports, the economy’s primary growth engine, fell 12 percent in seasonally adjusted figures from $3.6 billion in July to $3.18b. in October. Hi-tech sectors accounted for most of the drop in industrial exports, falling 15% in seasonally adjusted figures, from $1.87b. in July to $1.58b. in October. Mixed hi-tech industrial exports fell from $980 million in July to $849m. in October.

A breakdown of industrial exports by subsector shows that hi-tech exports fell 17% to $1.5b. in October from $1.79b. in October 2009. Most of the drop was due to lower exports of electronic components, which were halved over the 12 months. Pharmaceuticals exports fell from $500m. in October 2009 to $412m. in October 2010.

Huge new hotel planned for Tel Aviv

A huge 45-story hotel is slated to be built on the Ganei Sharona lot of the South Kirya in Tel Aviv, a person familiar with the matter has told Globes. The Israel Lands Administration will put the six-dunam lot on the market for NIS 55 million next month, the person said.

The lot is an integral part of the Ganei Sharona commercial, entertainment and recreation project won by two consortia of developers in an ILA tender last year.

Plans for the lot allow for a 40,000-square-meter, 800- room hotel and 2,000 sq. m. of commercial space.

The minimum price for the lot is reportedly NIS 35m., plus NIS 20m. in development costs. The Ganei Sharona area is south of Kaplan Street, along Tel Aviv’s main business axis. Adjacent to the lot zoned for the hotel is a second lot, for which the ILA will also shortly hold a tender. The lot is zoned for 90,000 sq. m. of commercial and office space.

Six Templar buildings slated for preservation in the area will be kept by the Tel Aviv Municipality for public uses. Three of the buildings have been leased to the Technion Israel Institute of Technology for an MA program in architecture and preservation.

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