Israelis snapping up homes in town planned for ultra-Orthodox

It's a chilly evening in the Sharon region moshav of Porat. Hemi Bar-Or and Noam Hillel are meeting with real estate investors at someone's home. The two are leaders of the campaign against ultra-Orthodox (Haredi) Harish, the city planned for Wadi Ara, and they're trying to persuade non-Haredim to buy there. Neither is technically a real estate professional: Bar-Or is an artist, and Hillel works in high tech, but over the past several years they've become excellent salesmen. After speaking with hundreds of people interested in buying into Harish, they know exactly what's motivating the masses: The low prices there. "In Afula, homes are more expensive and it's also farther north. There's no reason that prices in Harish won't become as least as high as those in Afula," says Bar-Or. "The next wave of tenders will pull up prices because there will already be an urban bloc." Hillel and Bar-Or explain why Harish is like Modi'in - Israel's last planned city - and like every other missed opportunity in Israel's real estate scene. They note that most people didn't buy homes in Caesarea or Shoham before prices shot up there. All the people present at that meeting seem to have done their homework, and all are convinced that Harish is a good buy. It seems like Bar-Or and Hillel can check off another 10 homes sold. "These are very attractive prices for such apartments - when the cost per 100 meters of construction, not counting land costs, can reach NIS 450,000 nowadays, and development fees are NIS 70,000," says Moshe, who is hosting the Porat event. "The question is who'll move into the neighborhood. If it's half Haredi and half non-Haredi that's just fine, but if it's more than half Haredi, then that's not as good because of the poor quality of construction in that community."

Fischer Seen Responsible Adult in Israeli Home Bubble: Mortgages

The central bank announced home loan limits this week while at the same time unexpectedly reducing the benchmark rate to the lowest in 22 months. The directives set a maximum loan-to-value for the first time, restricting mortgages to 50 percent for investors, 75 percent for those who have never purchased a home before and 70 percent for everyone else. “There is a problem with the real estate market, it can’t be ignored,” Yaniv Pagot, chief strategist at the Ramat Gan- based Ayalon Group Ltd., said by telephone. “The government is in a sort of “end of school” atmosphere. The Bank of Israel, as the responsible adult, will have to let out the hot air until the government solves the problem by increasing supply.” Fischer’s steps to slow home price growth come three weeks after Prime Minister Benjamin Netanyahu called early elections amid a budget deadlock, caused in part by the government’s inability to fund social-welfare spending promised after consumer protests over spiraling housing and food prices. At the same time, the low rates have fuelled ballooning mortgage debt, raising central bank concerns about the stability of banks.