Monday, September 10, 2012

Charedi couples fuel Israel's real estate boost

Haaretz   Who says young couples don’t have money to buy apartments? They flooded back into the market in the second quarter of the year, purchasing 19% more apartments than they did in the second quarter of 2011, and 8% more than in the first quarter of this year, according to data published by the State Revenue Administration. Investors also came back into the market, and purchases of investment apartments have been on the increase for six months running now, for the first time since 2009. 

It appears that the social protests of last summer are fading from the public consciousness, and the housing sector − one of the protests’ main targets − is back at the sales volume observed during the peak years of 2009 and 2010. The price of new homes decreased in the second quarter by 0.8% versus the first quarter. [...]

Haredim pushing up prices

The report makes note of one of the most important factors affecting the market − who the buyers are − and less on how prices changed. There was a 12% increase in transactions in the second quarter, after four consecutive quarters of decreases, it noted.

In total 24,500 apartments were purchased in the second quarter. The most significant increase based on region was in and around Jerusalem, where 807 new homes were purchased, most of them in ultra-Orthodox developments in Beit Shemesh.

8 comments :

  1. Where is the money coming from?

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  2. laughing to the bankSeptember 10, 2012 at 6:58 PM

    Hareidim ALWAYS push up the real estate prices in any area that they like.
    In Europe, the USA and elsewhere. Just think about it. It makes a lot of sense. They need a shul, a yeshivah, a bais yaakov, a mikvah, a street that the kids can run around unsupervised. Veiber that one can schmooze and vent to each other. ETC. So if a pioneer sets out to move to a cheaper area and builds all of the above then within 6 months the real estate gets grabbed up by investors and then by anyone who is looking for a house. They RUN and buy for whatever price because they know that in a very short time their homes will double in value.

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    Replies
    1. Please see my separate comment below, in which I point out that the people you call "investors" are actually land speculators and land monopolists, and that their "gain" is always everyone else's loss.

      I should also have noted there that when you say "real estate prices" you really mean land prices or land values, and when you say "real estate" you really mean land. Also, "homes" *per se* rarely "double in value", but land, including the value of land under and around homes, can and often does.

      The general scenario you describe ("if a pioneer sets out to move to a cheaper area and builds...") is discussed at length and in detail in Book IV, Chapter 2 of the original, unabridged edition of "Progress and Poverty" by Henry George, "The Effect of Increase of Population Upon the Distribution of Wealth" (pp. 235-243, the story of the savannah). Book IV is headed, the "Effect of Material Progress Upon the Distribution of Wealth."

      "Here, let us imagine, is an unbounded savannah, stretching off in unbroken sameness of grass and flower, tree and rill, till the traveler tires of the monotony. Along comes the wagon of the first immigrant. Where to settle he cannot tell—every acre seems as good as every other acre. As to wood, as to water, as to fertility, as to situation, there is absolutely no choice, and he is perplexed by the embarrassment of richness. Tired out with the search for one place that is better than another, he stops—somewhere, anywhere—and starts to make himself a home..." (the beginning with paragraph 10 of that chapter), which may be found online here:
      http://www.econlib.org/library/YPDBooks/George/grgPP20.html#Book IV, Chapter 2

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  3. Recipients and PublicitySeptember 10, 2012 at 10:51 PM

    This is an important piece because quite often in the slander that is hurled at Charedim in Israel is that they are allegedly "parasites" that "feed" off the state or that they do not "contribute" to the state while others go to the army etc.

    But the underlying truth and reality is that the Charedim inject vast amounts of money into the Israeli economy by virtue of their existence, and they are NOT leaving Israel in droves like the millions of secular yordim have. Meaning: the hundreds of thousands of Charedim, men women, children have needs and PURCHASE clothing, food, housing, health care, appliances, jewelry, transportation and all the employment and injecting of wealth and capital into the Israeli economy that comes with that.

    For clothing there are related industries, such as stores, shipping, trucking, alterations. Think of the hundreds of thousands, if not millions, of shirts, shoes, dresses, underwear, head-gear, coats etc etc etc, each an industry in itself

    For food think of the vast amounts of food farmed, produced, stored marketed, sold and purchased, all vast industries that inject wealth and creates employment for many people.

    Housing means construction and development, with lots of machinery, building supplies, architects, engineers, and a huge construction work force that injects vast sums of money and gives employment to all sectors of the Israeli economy, secular Israelis, Arabs and a whole chain of suppliers, brokers, dealers, and managers who make profits and livelihoods from the demands for housing.

    Homes need appliances, phones, lights, washing machines, dryers, air-conditioners, etc etc etc, retailers, wholesalers, importers a whole chain that benefits from this, all the way to those overseas who ship it.

    Charedim love and need to travel (for family simchas, work, to be with family and rebbes on yom tov), and that supports the bus, airline and car businesses and industries

    As for the wise guy who asked "Where is the money coming from?" -- the answer is, in America Charedim do not have "army" worries and are free to make money and they do and they quite often bring it to Israel to invest. In Israel, if they are Charedi professionals, such as olim from America who are doctors, accountants, IT experts, they EARN their money and spend it. And as for those Charedim who have not attended colleges, like Chasidim, they are in the age old business of buying-selling, retail-wholesale, import-export, wheeling-dealing that Jews have been doing since the dawn of time, with the help of the proverbial Yiddishe kop and Gemora kop.

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  4. israeli charedim often beg door to door for money to buy apartments for their kids. in american and in israel. never mind that the rest of us are saving to buy our own apartments. it's a chutzpa.

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  5. Recipients and PublicitySeptember 11, 2012 at 10:10 AM

    "lurker said...israeli charedim often beg door to door for money to buy apartments for their kids. in american and in israel."

    RaP: True, some may do it, maybe a small minority, but it is absurd to state or assume that every apartment that a young Charedi couple buys in Israel comes from begging. Firstly, the Israeli government has various programs to help buy apartments, but most of the money does not come from that source either. There is vast invisible economy that Charedim run and participate in, running from import-export, wholesale-retail, buying-selling...of ANYTHING that they can get in to. They also receive huge sums from the American and European and even South American branches of their families who know that they must buy the young couples apartments because in Israel the notion of "renting" is not as accepted as it is in Western countries.

    "never mind that the rest of us are saving to buy our own apartments."

    RaP: No one is forced to give away their money, except when its governments that force citizens to pay taxes, and in Israel of all places the secular government has some of the highest tax rates in the world that forces the population to give to the government whether the citizens like it or not. When the Israeli government taxes its citizens it is not answerable to anyone and does what it wants with the money and spends it in ways that it wants even if the citizens get nothing back in return, like supporting umpteen ministries and ministers and the hated PEKIDIM bureaucrats who basically do nothing, get fat salaries and benefits and pensions for life and lord it over the rest of the people.


    "it's a chutzpa."

    RaP: You are a chutzpan. In any case, asking for tzedaka is not a chutzpa, it is a mitzva to help and if you don't want to, then don't do it.

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  6. To fully grasp and understand the far-reaching significance of this post, it's necessary to carefully read and comprehend the original, unabridged version of the definitive book on this subject, "Progress and Poverty" by the American economist and social philosopher Henry George, although the comment above by "laughing to the bank" is roughly on the right track. The people "laughing" calls "investors" are actually land speculators and land monopolists, and their "gain" is always everyone else's loss.

    "Progress and Poverty - An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy" By Henry George (1839-1897). First Pub. Date 1879 [San Francisco].

    TABLE OF CONTENTS
    Cover
    Table of Contents
    About the Book and Author
    How the Book Came To Be Written, by Henry George, Jr.
    Preface to Fourth Edition
    INTRODUCTORY The Problem
    BOOK I. WAGES AND CAPITAL
    I.1 The Current Doctrine of Wages—Its Insufficiency
    I.2 The Meaning of the Terms
    I.3 Wages Not Drawn from Capital, but Produced by the Labor
    I.4 The Maintenance of Laborers Not Drawn from Capital
    I.5 The Real Functions of Capital
    BOOK II. POPULATION AND SUBSISTENCE
    II.1 The Malthusian Theory, Its Genesis and Support
    II.2 Inference from Facts
    II.3 Inferences from Analogy
    II.4 Disproof of the Malthusian Theory
    BOOK III. THE LAWS OF DISTRIBUTION
    III.1 The Inquiry Narrowed to the Laws of Distribution—Necessary Relation of These Laws
    III.2 Rent and the Law of Rent
    III.3 Of Interest and the Cause of Interest
    III.4 Of Spurious Capital and of Profits Often Mistaken for Interest
    III.5 The Law of Interest
    III.6 Wages and the Law of Wages
    III.7 The Correlation and Co-ordination of These Laws
    III.8 The Statics of the Problem Thus Explained
    BOOK IV. EFFECT OF MATERIAL PROGRESS UPON THE DISTRIBUTION OF WEALTH
    IV.1 The Dynamics of the Problem Yet to Seek
    IV.2 The Effect of Increase of Population Upon the Distribution of Wealth
    IV.3 The Effect of Improvements in the Arts upon the Distribution of Wealth
    IV.4 Effect of the Expectation Raised by Material Progress
    BOOK V. THE PROBLEM SOLVED
    V.1 The Primary Cause of Recurring Paroxysms of Industrial Depression
    V.2 The Persistence of Poverty Amid Advancing Wealth
    BOOK VI. THE REMEDY
    VI.1 Insufficiency of Remedies Currently Advocated
    VI.2 The True Remedy
    BOOK VII. JUSTICE OF THE REMEDY
    VII.1 The Injustice of Private Property in Land
    VII.2 The Enslavement of Laborers the Ultimate Result of Private Property in Land
    VII.3 Claim of Land Owners to Compensation
    VII.4 Property in Land Historically Considered
    VII.5 Of Property in Land in the United States
    BOOK VIII. APPLICATION OF THE REMEDY
    VIII.1 Private Property in Land Inconsistent with the Best Use of Land
    VIII.2 How Equal Rights to the Land May Be Asserted and Secured
    VIII.3 The Proposition Tried by the Canons of Taxation
    VIII.4 Indorsements and Objections
    BOOK IX. EFFECTS OF THE REMEDY
    IX.1 Of the Effect Upon the Production of Wealth
    IX.2 Of the Effect Upon Distribution and Thence on Production
    IX.3 Of the Effect Upon Individuals and Classes
    IX.4 Of the Changes That Would Be Wrought in Social Organization and Social Life
    BOOK X. THE LAW OF HUMAN PROGRESS
    X.1 The Current Theory of Human Progress—Its Insufficiency
    X.2 Differences in Civilization—To What Due
    X.3 The Law of Human Progress
    X.4 How Modern Civilization May Decline
    X.5 The Central Truth
    CONCLUSION. The Problem of Individual Life
    http://www.econlib.org/library/YPDBooks/George/grgPP.html

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  7. This is the moral boosting data for young couple who wants to buy his own house in big cities. Now they are saving their money to buy his own house. I think it's good for development for any country. Young couples are also making interest to invest in droit immobilier israel real estate in Israel.

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