The first tender in Rosh Ha'ayin under the target price housing program was published today. Government assessor Tal Alderoti provided the key figure - the value of an apartment square meter for those eligible - NIS 9,400 including VAT. In other words, a standard 100-sq.m. apartment will cost NIS 940,000. The contractor's cost according to the Ministry of Construction and Housing's standard is an estimated NIS 5,300 per sq.m. including VAT for buildings up to 10 storeys; the cost is greater for taller buildings.
The target price plan, initiated by late Minister of Construction and Housing Uri Ariel, is the only current option for buying a cheap apartment, after the cancelation of former Minister of Finance Yair Lapid's 0% VAT plan.
The tender in Rosh Ha'ayin contains 10 lots for the construction of 2,048 high-density apartments, 1,243 of which are housing units in the framework of the target price plan. In order to make the tender more attractive, two of the lots include rights to commercial space. A supplementary tender for 700 additional housing units in Rosh Ha'ayin in the target price framework is slated for publication next week, and the Ministry of Construction and Housing will summon contractors for briefing and clarifications about the tender terms and a tour of the land involved.
The apartments in Rosh Ha'ayin will account for 60% of the total in the tenders, and 80% of the apartments mentioned in the announcement of the program. Under the roof agreements signed a year ago, the Ministry of Construction and Development's development costs will be NIS 216,000-250,000 per housing unit, and up to NIS 290,000 per housing unit on one of the lots.
These development costs have mushroomed over the past year. In Karmiel, for example, where land conditions are more difficult than in Rosh Ha'ayin, the Ministry of Construction and Housing demanded development costs of NIS 70,000-100,000 per apartment two years ago, and over NIS 200,000 was demanded in the the recent tender a few months ago.
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2015
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