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Is bubble about to burst for Israel booming housing market

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					PAGE 12 A JEWISH PRESS of PINELLAS COUNTY                                                                                                                                          MARCH 11 - 24, 2011



Is bubble about to burst for                                                                                                                               Jewish groups,
Israel’s booming housing market?                                                                                                                           Israel mobilizing
By DINA KRAFT                                      housing in major urban centers. Although                                                                to aid Japan
JTA news service                                   there are great income disparities, the aver-                                                             Staff and wires
   TEL AVIV — Soon after Leora’s second            age Israeli family earns about $2,000 per                                                                  The Jewish Federations of North
child was born and she and her husband began       month.                                                                                                  America has set up an emergency relief
looking for a larger home, Israel’s new real          “The affordability on the demand side is                                                             fund to help those affected by the massive
estate reality smacked them in the face.           almost unbearable, and this has been consis-                                                            earthquake and tsunami that hit Japan.
   Though the couple had bought a two-bed-         tent for almost two years now,” said Danny                                                                  “We are determined to provide emer-
room apartment in Tel Aviv six years earlier       Ben-Shahar, a real estate expert in the depart-                                                         gency relief as quickly as possible and to
that had appreciated to $650,000, more than        ment of architecture and urban planning at the                                                          work with our partners to provide support
triple what they paid, they still found them-      Technion-Israel Institute of Technology. “We                                                            over the longer term as well,” said Fred
selves priced out of the local market. One         cannot maintain prices as high as they are now                                                          Zimmerman, chairman of the Jewish Fed-
apartment in a basement underneath a park-         because of the affordability effects.”                                                                  erations’ Emergency Committee.
ing lot was listed at $468,000.                       The soaring housing prices also have             A luxury skyscaper near completion in central Tel      Donations can be made to the fund
   They are now planning to move to the            sparked fears that Israel is in the midst of a      Aviv, where prices are skyrocketing.                online, by texting RELIEF to 51818, or
coastal town of Pardes Hanna, about an hour’s      housing bubble.                                                                                         through JFNA’s national mailbox at The
drive north of Tel Aviv, where prices also have       In the interests of stabilizing the housing     investment. And with the world economic              Jewish Federations of North America,
climbed significantly but where they can still     market, the government has begun taking            downturn wreaking havoc with stock mar-              Wall Street Station, PO Box 148, New
find a house with a garden for the same price      steps to cool it. The Bank of Israel is raising    kets, local investors have poured even more          York, NY 10268.
as the apartments they saw in Tel Aviv.            interest rates and minimum mortgage down           money into real estate.                                 JFNA said it is also working with its
   “Ordinary, hard-working people cannot           payments to 30 percent. The government has            “People here hate renting, even though            partner the American Jewish Joint Dis-
live in the city, and when they do they sacri-     pledged to build additional housing to in-         rent in Israel is quite cheap while buying           tribution Committee, which also started
fice a lot to be here,” said Leora, who asked      crease supply. And the Knesset has approved        homes is very expensive,” said Zvi Wiener, an        a Japan/Pacific disaster relief fund, to
that her real name not be used. “It also feels     several changes in real estate tax laws aimed      economics professor at Jerusalem’s Hebrew            support relief efforts. (www.jdc.org/do-
so out of touch with political realities here:     at curbing investor demand.                        University. “There is no culture of investing        nation).
Where does it cost a half-million dollars to be       Shay Lipman, a real estate analyst at IBI       in financial markets. It’s considered instable.         Other Jewish organizations that set
a prime target for nuclear weapons controlled      Ltd., an investment house in Tel Aviv, says the    And so people have a tendency to over invest         up emergency funds in the immediate
by a madman?”                                      state’s ownership of 92 percent of Israel’s land   in real estate.”                                     aftermath of the disaster included B’nai
   Israel has become a leader in the global real   is a major factor in the housing shortage.            Chaim Kaufman, a veteran real estate agent        B’rith International (www.bnaibrith.org)
estate market, with prices soaring in double-         “Although the government says it will           whose offices in central Tel Aviv face Rabin         and the Orthodox Union (www.OU.org/
digit rates in recent years, particularly in the   release more land for building, it tends not       Square, sees the deeply rooted desire to buy         earthquake).
densely populated center of the country that       to happen and so there is nothing to change        apartments as part of the culture in Israel.            Meanwhile, early indications show
includes Tel Aviv and Jerusalem. Last year         the amount of demand,” Lipman said. “I             Some 70 percent of Israelis own their homes,         that Japan’s Jewish community of ap-
the average price for owner-occupied homes         don’t see prices dropping even though it has       a relatively high figure compared with other         proximately 1,000 people, most of whom
in the country rose more than 16 percent,          become very difficult for young couples to         nations.                                             are located in or around Tokyo, has been
according to official statistics — a marked        buy homes.”                                           “Historically, Jews were wanderers and so         largely unaffected, according to the
contrast to the gloomy straits of the inter-          Foreign buyers of real estate in Israel,        there is this need among people here to buy,”        JFNA.
national housing market, particularly in the       particularly Diaspora Jews from the United         said Kaufman, formerly the president of the              In Israel, a civilian Israeli search-and-
United States.                                     States, England and France, have helped fuel       real estate brokers association in Israel.           rescue team organized by IsraAID, an
   In 2010, the average home price in Tel          demand and lifted prices, especially in the           “Often you will see relatives and parents         Israeli humanitarian umbrella group, left
Aviv was approximately $449,200 and ap-            luxury market. In the past they tended to buy      contributing money so adult children can buy         Sunday, March 13, to assist in an area to
proximately $398,200 in Jerusalem. Haifa           almost exclusively in Jerusalem, but in the        a home,” he said. “As for the Diaspora Jews,         be determined by Japanese authorities,
showed the most significant increase, with a       past few years more have been buying up real       buying here gives them the feeling that they         according to The Jerusalem Post.
leap of 20 percent in one year, according to       estate in cosmopolitan Tel Aviv.                   are being good Zionists and helping Israel.”            Israel was one of the first countries
government figures.                                   Israelis, too, are buying. In Israel, a coun-      It’s also helped themselves, he noted. “Real      to offer Japan aid, contacting Japanese
   But with the high prices have come a great      try approximately the size of New Jersey,          estate here,” Kaufman said, “has proven itself       officials just one hour after the quake on
challenge for families seeking affordable          real estate long has been considered a safe        to be an exceptional investment.”                    Friday, March 11.

				
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