In the wake of soaring home prices in high demand areas, such as greater Tel Aviv and the Sharon, top real estate developers have set their sights elsewhere, on the "emerging markets" in the Israeli real estate scene. A survey by Deloitte Brightman Almagor Zohar found that the developers believe that home prices and rents will continue to rise, especially outside greater Tel Aviv.
According to the respondents, the three best cities in which to buy an apartment are Rehovot (cited by 25% of the respondents), Ness Ziona (23%), and Haifa (21%). They are followed, in descending order by Yokne'am, Gedera, and Pardess Hanna (cited by 19% of the respondents), Beersheva and Ashkelon (18% each), Netanya and Yavne (16% each), Hadera (12%), Modi'in and Tel Aviv (11% each), and Herzliya (9%).
In the previous survey, in May, 44% of developers said that Hod Hasharon was the best city in which to buy a home; only 5% of developers cited the city in the current survey. The drop is apparently due to the rise in home prices in the city in the past few months.
In the previous survey, 38% of the respondents said that Haifa was the best city to buy an apartment, and 31% cited Ness Ziona. Only 6% of respondent said that Beersheva was a preferred target for investment, compared with 18% of respondents in the current survey.
Following a 51% rise in the average home price since mid-2007, according to the Central Bureau of Statistics, developers are beginning to see an end to the boom, perhaps because of the government's efforts to cool the market. The survey found that 41% of respondents believe that home prices will continue to rise in 2011, compared with 74% who gave a similar answer for the coming year in the survey 12 months ago. 45% of respondents in the current survey predict no major change in home prices in 2011, and 14% believe that prices will fall.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2010
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