Showing posts with label Real Estate. Show all posts
Showing posts with label Real Estate. Show all posts

Monday, March 12, 2018

Unequal Wealth: Building Boom is One Consistent Factor

New construction near the central train station, Tel Aviv is filling every nook and cranny with new construction © D-A Vider
Israel's economy has been on an economic growth spurt for over fifteen years. The GDP statistics somehow are not reflecting the reality on the street. The first obvious sign of prosperity is steady building trend, especially in high rise apartments and office buildings. In the central region, there is actually less building than in locations at the edge of Gush Dan (Dan, the central region of Israel). The real estate inflation, especially the residential apartment costs, which were going up at 5% to 8% annually for over a decade. Many visitors to Tel Aviv are surprised by the change in the city in the last five years. Foreign drivers find themselves at a lost when trying to retrace old routes but confused by new construction. In the section of Tel Aviv near Azrielli towers (left white and gray buildings in the photograph) and the central train station, construction is now at a strong growth. A new light rail project with under and above ground tracks is also now in works. So why it seems as if Israel is on an economic growth spurt on the ground but the economists are reporting average of 4% the last 15 years? (see chart below)


Thursday, November 17, 2016

Haifa, an alternative to Tel Aviv?

Standup Surfing in Bat Galim beach Haifa. Slower lifestyle, quieter residential neighborhoods and affordable housing is luring Tel Avivians to north Israel. Haifa is one of the preferred destination © 2016 D-A Vider

Lifestyle and cost of living in Tel Aviv are compared to many European cities. Israel's central district (Gush Dan) has been on a growth spurt the last fifteen years. Most visitors who were here just a decade ago are amazed by the developments. But many Israelis are not happy. Housing prices are climbing steadily much faster than salaries. City centers (both Tel Aviv and surrounding suburbs) are crowded and noisy. The quaint Mediterranean beach cities, small communities hidden in sandy dunes, towns built in historical biblical locations and small agricultural settlements are gone. Simply put the last thirty years has turned central Israel from a quiet semi-rural land to a developed suburban sprawl. This is the lifestyle cost Israelis are paying for world leading economic success. When Israelis tell people about one of the most successful economies in the whole last century. Essentially creating a country from ideas and sand dunes. From colonial rule and antiquated laws to a modern fully functioning democratic republic - the personal cost is rarely mentioned. Yet this is the life in Israel.


Thursday, February 11, 2016

Live on a Green Street

One of Givatay'im's "green blocks" is Shenkin Street. Nice gardening example in this side entrance.
Some new visitors to Tel Aviv and the surrounding areas are surprised by "all the green". Which is a bit strange these days. Maybe twenty years ago, when drip irrigation was unknown around the globe and when the "Green Line" did not have political connotation, that was excusable. But today this is not the case. A big part of Israel's quality of life effort goes to giving everyone the means to beautify their surroundings. While real estate agents do not promote this one factor heavily, apartment seekers favor green streets. In Tel Aviv and surrounding towns, municipalities are investing into "greening" public places and residential streets. When looking for an apartment to rent or buy in Tel Aviv, make the green factor into account. Once you start looking for these hidden gems, you will have a new perspective on Israel.


Wednesday, December 2, 2015

North Tel Aviv Construction

Beautiful repeating geometric shapes in new north Tel Aviv neighborhood, Derech Namir, Nov. 2015

Tel Aviv proper does not have large tracts of land for new construction. The few empty areas have been spared so far are falling in the hands of developers. Old areas which can be cleared (as the old produce wholesale market on the Cheshmonaim street and the IDF headquarters) are also turning into target for luxury apartment builders. The shift from low cost mass construction to luxury is steady and strong. Waves of large immigration, which defined Israel's construction style in the past, are not expected in the near future. With the continued economic growth of the state, both consumers and builders are looking to buy bigger and better-finished apartments. Also the demand to live in the Tel Aviv area is stronger than ever before. Building large luxury neighborhoods in central Israel is strong now and should continue unless a major economic change hits.

Tuesday, October 20, 2015

Visiting Tel Aviv - A Surprise in Building & Quiet

Gail (a visitor from the US) with the Tel Aviv "duck" | © 2015 DAVider

The past few years, maybe going back a decade, Israel has not been a destination for visitors. This is even true to Jewish and Christian visitors who would have considered a trip to Tel Aviv and Jerusalem in the past. There is no getting away from the massive negative image Israel has experienced internationally. But the ones who came to Israel more than fifteen years ago take the stories of fear and violence here with a grain of salt. Gail F (an old friend visiting from the US) found the central part of Tel Aviv modern, lively with shops, cafes and restaurants buzzing, and a great place to see the strong new building trend. Comparing Tel Aviv's expensive Real Estate prices to the ones in San Francisco was just one interesting comment. She is also somewhat surprised by all the construction (building cranes filling the horizon) in the central part of Tel Aviv. For me it's just another point of reference on what we notice daily (but sometime forget). 
What's with the Tel Aviv "duck"? Search "Tel Aviv duck", here is one story in the Forward.

Tuesday, September 29, 2015

Ramat Gan Bursa vying for Tel Aviv's FinTechies

Ramat Gan, just east of Tel Aviv is chasing FinTech firms with new attractive construction @ DAVider 2015
While Tel Aviv is undisputedly the location for Israeli FinTech entrepreneurs, Ramat Gan is still chasing the big city technologists and finaciers for attention. Long considered the "orphan child" of the central region, construction at the business areas is moving at a faster clip than anywhere in Tel Aviv. Allegation of cutting lengthy and expensive construction approval processes have been buzzing for decades (actually have turned into a conviction of the last mayor). Yet, the smaller (and much less glitzy) and more affordable city, somehow manages to continue building at a fast pace. There is a new effort to turn the more traditional location, home to banks, insurance companies and financial institutions into a start-up hub. Yet, this illusive goal, of capturing the imagination of the Israeli entrepreneur (and investor) within one location, is still unattainable. But not for the lack of trying. [more on this in future posts]

Monday, September 21, 2015

Tel Aviv High-Rise Construction

New hi-rise buildings in north Tel Aviv still going up fast @ DAVider 2015

Tel Aviv construction is still going strong with luxury apartments leading the sector. Parts of the central region, left undeveloped, are now starting to be filled with high-rise buildings. In areas from Tel Aviv to Petach Tikva, buildings with 24 to 32 stories are planned or under construction. Although the Israeli economic statistics are showing almost zero inflation and zero growth, in the construction sector this is now what we see. 

Tuesday, September 8, 2015

Apartment Listing: Dizengoff @ Bazel $500K 45mtr-sq 1 Bdrm

Apartment listed in north Dizengoff realtor: 45 sqr-mtr, 1 bedroon, US$ 500,000
The prices of Tel Aviv apartments are still going up. After years of steady and fast rise, Tel Avivian's are no longer screaming, protesting or surprised. A short spurt of foreign buyers, seems most likely French from the street level sounds, are keeping sellers happy. The state tried to stem the quick rise in housing prices will all kind of programs. Yet housing starts, tax incentives and even reduced building red-tape is still alluding Israelis. This listing, common in north Tel Aviv realtor windows, lists a one bedroom 45 square meter apartment for two million shekels. Sticker shock is common to foreigners, but quickly fades once people see a few properties and compare prices. For the most part, prices for similar apartments are fairly uniform. Most apartments in desirable locations are new or renovated and in good condition. Happy house hunting  ;-)


Sunday, September 6, 2015

This Week's Pictures: Beach, Building & Job Search

Three pictures from a daily life in Tel Aviv...

New building almost finished at Ben Yehuda and Arlozorov. Last year 55 - 65 sqr-mtr apartments were selling for NIS 2MM

Taking advantage of the hot weather on the first week of September, beach-goers catch the last rays of 2015


Wednesday, August 7, 2013

High Price Apartment Solution: Higher Mortgage, Lower Interest, Easier Credit

Gindi, a leading real estate developer, market luxury in Tel Aviv (Israel)
As Israel's real estate prices soar, banks are not sitting by the sidelines. Banks are making home buying easier than ever before. Israelis are taking more debt, at a faster rate, worrying the central Israel bank regulators. Yet Israeli mortgage is not as leveraged as the US and European markets were when the real estate bubbles collapsed there. While Israeli regulators and policy makers (i.e. government agencies) are worried and taking steps to lower the market's exposure to collapsing prices, Israelis are still following the path buyers in the west went down before. Are Israelis not aware of the danger in taking high percentage mortgages? Are Israeli banks unaware of the risk in a collapsing housing market? What about the regulators and policy makers, are they not aware of the economic collapse due to real estate bubbles? Well, it is not the case of now knowing or misunderstanding. But it is a case of “this happens to others, not to me” (or to “us” here in Israel). We call it the “ostrich behavior”, stick your had in the sand when you are being chased. You don't have to be Australian to understand the ostrich analogy. Pretty much every western culture understand ignoring reality and hoping not to fall in the same situation as others. Just keep on ignoring things enough, and hopefully things will take care of themselves.  

Sunday, August 4, 2013

IDF “Kirya” Command Base to Become Israel's Highest Building

Main tower dubbed "Toblerone" is made up of triangle tubes like the chocolate
A plan to turn the “Kirya” IDF command base to high rise towers was released last week. A project plan with the tallest building in Israel, 80 stories high. With additional three buildings housing commercial, office, and residential space. The project is nicknamed Toblerone after the triangle chocolate. An eighty story building made up of Toblerone looking triangle long sections tied together. Three additional buildings, one for offices and two for residential apartments and commercial areas at the first floors are also planned. The project answers the question Tel Avivians asked for decades: “when will IDF move out of Tel Aviv?” At least when it comes to a corner of the base, the answer is a few years. We have not seen a statement from the IDF, but that may be just a matter of waiting a little. The construction project, due to it's location and large size, is managed by the Israeli land authority. This is a unique situation of a semi-government agency, which manages most of the land in the state, directly managing a construction project. Only time will tell if the land authority works as efficiently as private construction companies.  

Thursday, August 1, 2013

Gindi Tel Aviv Old Wholesale Market Project

Gindi's Givon / Old Wholesale Market project is one of Tel Aviv's biggest
In a central part of Tel Aviv, a large parcel of land from the old wholesale market is in the midst of construction. One of the last large pieces of land in the middle of the city is being turned into a luxury complex befitting the fast and furious 1990s and 2000s. Decades with flair and decadence not seen here for a long time. In an effort to make a large project safe for investors and worth the opportunity, Gindi and city planners are designing a whole luxury neighborhood. The complex includes parks, schools, retail spaces, all at a luxury level only seen one building at a time. The project was conceived at the peak of euphoria in Tel Aviv real estate luxury development era. It is still left to be seen if such a large number of luxury apartments can be sold all at once. Yet, the developers and investors seem not to worry, as construction is going full tilt.

Sunday, July 14, 2013

High Cost Tel Aviv Properties: A Continuing Trend

NOT Tel Aviv, city of Mt. Maunganui, Not the expensive real estate of Tel Aviv (from
Tel Aviv is one of the most expensive city in the world to buy a property. This has been the story until 2008, when many of the world's economies collapsed and comparison costs stopped coming out. The economy here also slowed down, not exactly a collapse. What makes Israeli properties so valuable? One explanation is supply and demand. Tel Aviv central zone was built quickly in the 1920s and 1930s. Small apartment buildings, four stories high with two bedroom apartments was the standard. Then in the 1950s, the rest of Tel Aviv, to it's borders was filled in. Flash forward to the 1980s and 90s and demand (and available money) is pushing apartment prices up. This drives steady new luxury construction. Since Tel Aviv does not have readily available open land for construction, whatever land is available is expensive. An alternative to open land, replacing old buildings with new one. This technique is called “clearing / building” (pinui / binui): clearing existing property, building new one.

Thursday, July 11, 2013

Who Buys Apartments in Israel?

The Israeli real estate market is an attractive investment. It's been that way for at least a decade, some say even longer. Foreign individual investment is so prominent, it's been blamed for the shortage of rental apartments in Jerusalem, the high price of apartments in Natanya, and the shortage of low cost apartments all over Israel. Putting blame aside, let's look at who buys apartments in Israel and what it means to their owners. From a quick, unofficial (personal) survey, I see foreign apartments buyers in these categories:
  • High income individuals interested in Israel
  • Zionist and Jews (a few Christians) which travel often and support Israel
  • Jews in areas of stress interested in immigrating to Israel (French recently)
  • Individuals familiar with Israel and with international investment aptitude

Monday, July 8, 2013

Buying Luxury Apartments in A Group Project: Bavli Project Offer

To reduce the cost of luxury apartments, a scheme of building and financing with a group is an alternative to buying from a traditinal builder. A general contractor organizes a construction “project”. The organizer, finds land, hires an architect and selects a builder. Then they offer apartments for sale in the project. In the early stages, before many units are sold, the project organizer does not spend a great deal of money, until she is sure the project will actually be done. For the buyers, the apartments cost less, up to 20% less than equivalent units in the same area sold by traditional construction companies. In general, it has been claimed that building using contractor projects are slower to be finished and sometimes are not as luxurious as ones built by traditional builders. Usually, construction groups raise money for each unit gradually as the project progresses. This may help buyers pay or raise money for a more expensive unit. In Israel, this scheme is still not a large part of new construction,  yet it is a good laternative to some buyers.

Wednesday, July 3, 2013

Luxury High Up: High Rise Towers (in and around Tel Aviv)

Tel Aviv skyline is still pocked with tall construction cranes, even after two decades. Yet developers seem to find a few open lots to build large buildings. The latest large construction area, just north of the main train station (Sovidor / Central station), is at it's final phase of construction. An extension to one of Tel Aviv's old upscale neighborhood (Bavli.) Also, in other areas of Tel Aviv and surrounding towns (Givatay'im, Ramat Gan, Petach Tikva) high rise luxury apartments are being built at a steady pace. These buildings are typically 20 stories or more high (up to 39 stories.) In these new towers 2 to 3 bedroom apartments, on average, sell between 2 to 3 million shekel ($550 to $830 thousand.) Design is similar: finished in glass and white stone exterior. Interior is modern in an open floor plan unique to Israeli design.


Saturday, June 29, 2013

Luxury Homes in Green: Gardens and Parks (in the city)

The first impressions of Israel people remember is “the green”. It surprises Europeans and Americans, who come from wet climate, to see so much green foliage in a semi-arid environment. Israel's history explains the obsession with making the land green. So today, one of the luxuries in living is having a private garden or living close to a public garden. The ultimate luxury is a private garden, no matter how small. From a few large pots on a balcony to a piece of land enough for one large fruit tree. All the way to living at the edge of a public garden (similar to American obsession of building at the edge of a private golf course.)

Friday, June 28, 2013

Opportunity for Americans: Israeli Luxury Home Market: Turning Normal?

Israeli real estate market has been in an upmarket phase for over two decades. Luxury homes and apartments were the engine that drove building and architecture fields into a strong and growing market segment. Luxury construction has even become a vital export segment. Israeli architects and builders are exporting construction services due to their luxury construction experience. Finally, luxury construction has been a key Israeli success story, to the point, of attracting investors and individuals to buy homes in Israel, bringing in dollars and euros. With all that, it seems like the luxury propery party is over, or at least taking a rest. Luxury apartments in the Tel Aviv area are not selling in 2012 as fast as they did earlier. Also, high visibility projects with very high price units (above 100 million shekel per property, about $50 million) are also sitting without much interest. (where are Ellison, Brofman, and Adelman when you need them?) 

Thursday, October 29, 2009

Real Estate in Israel: A New Era of Growth, Investment in Rental Properties

Tel Aviv apartments are being bought by Israelis for investment. They are rented at higher prices than in the past. There is also a rise in apartment renovation both by investors and by owners. This trend reflects a shift of money from investment in financial instruments which started two years. Mutual and hedge funds are shrinking while investment Real Estate is growing. I believe this is an opposite trend than the American and European economies, where Real Estate was booming for many years until the bubble burst. Usually a long trend in investment is a good sign for the future strength in the economy. The new investors in apartments are also raising rental prices. While rental price rise in Tel Aviv is mostly seen as a negative economic trend, there is not much said about the huge amount invested by individuals. Israelis have been pushed to own their own apartments ever since the state was founded in 1948. This desire to own your own apartment came at a cost of a rental apartment market specially in Tel Aviv. But like cities all over the world, there is a need for good rental apartments. Since the rental market was not a strong investment destination for Israelis, rental apartments are usually in bad shape and are owned by out of towners.


Monday, August 24, 2009

End of Summer - Hot and Slow - Economy Heats Up

Summer is at it's end. In Israel it is a quiet time. Kids are shopping for school supplies. Families are taking their last vacation, there is one full week for summer vacation (called here Ha'chofesh Ha'gadol - literally 'the big vacation'). The peak hot days of mid-August are over with. The tourists have mostly left so 'the natives' are out in bars and cafes. You can go back to sleeping with the windows open. If you plan to come to Tel Aviv in the summer this is probably the best time. There is still plenty of good beach days, now that mid-day peak temperature are bearable. So if you were thinking of coming for a visit, do so now.

Now for the economy. Do you remember the Clinton campaign slogan: it's the economy, stupid? In Israel now this seems to be the case. The Netanyahu administration seems to be completely ignoring other things. Rightly so. The Israeli economy did not heat up the last ten years like other world economies. Locally there was the Lebanon war, than the Hamas take over in Gaza. Economically the Israeli Real Estate market never had the bump up from increase credit. There was never an increase credit here, the banks are too conservatives for that. Israel also did not suffer the sub-prime crash and then financial crisis which followed. But we kind of feel that the market should be going up now. Which is quietly happening, but without international news coverage. Israel economy is too small to make the news. Also, people expect news of Israel to be either something with the Palestinians or a high tech genius making it good in silicon valley. The Shekel is up and not going down. Stanley Fischer's attempt at holding back the shekel's rise with $10 million per day purchase of US dollars has finally been declared a silly attempt at controlling the Israeli shekel's exchange rate. People are spending more overseas and buying dollars and euros. Inflation is up in real terms. In Tel Aviv and the surrounding areas property values are going up slightly. Rental prices go up first, they are more flexible. Home prices are holding flat but rumors of higher demand and inflation in building supplies and builder's salaries are starting to worry buyers. In addition, since Israeli real estate prices have not gone down and are expected to go up, builders and Realtors are pitching to foreign investors. Everyone is hoping to get a piece of the foreign pie, even if it is smaller now. There is also a slight rise in interest form French and British Jews who see investment in Israel as a way to show solidarity for Israel and get a good return. Well, as the air temperature drops the economic temperature raises. If you do not plan to come fore vacation, come to invest. Jump right in, the water's fine!