Israeli property investors are watching with interest the process of approving new residential city center developments on the sites of former bus stations in cities across Israel. Herzliya is the first such city center development to receive planning permission, but others will follow.
Many Israeli cities have relocated their main bus stations, leaving city center sites that are ripe for development. In Herzliya, Nitsba have just received permission to build 400 apartments on the site of the former central bus station. Nitsba is owned by Haim Tsuff, one of Israel’s leading developers, as a subsidiary of the Airport City company and Jerusalem Oil Exploration Ltd. They also own the development rights to 18 other bus stations around Israel, and they are also involved in building a new industrial park in Rosh HaAyin together with 1,200 residential apartments.
Although the central Herzliya bus terminus was closed in 2016, the local planning committee granted initial permission for the site’s development back in 2010, but final permission was only given in July 2018. The new project will be called Herzliya Park and is planned to include a number of towers containing 400 apartments which are expected to cost at least NIS 900,000 per apartment.
The story of this project and the potential development of further city center sites is typical of the many bureaucratic delays that hamper real estate developments in Israel. It may take decades for permission to be granted for the development of the other central bus station sites around the country. While home prices continue to rise, the building of residential apartments in many city-center sites are delayed by the planning process.
At the same time, the process of upgrading much of Israel’s sub-standard housing stock to meet the latest building standards, is also taking longer than expected. The TAMA 38 program was devised to upgrade buildings that stand on concrete stilts to survive potential earthquakes. Uptake of the program by residents has been extremely slow, because of the inconvenience of moving out while your building is renovated. This has held up the building of extra apartments in city centers, and has also left many buildings vulnerable to quakes.
Recent Israeli government programs to manage the demand for new homes have not been matched by any significant increase in the supply of new apartments, particularly in Israel’s most sought-after central cities. Apartment prices remain high, particularly in the Mercaz and Sharon districts. The highest increases in prices in recent months have been recorded in Rehovot, Jerusalem and Netanya.
Investors are watching with interest the process of approving residential developments on the sites of former bus stations, and also the development of new light rail stations across Central Israel. It is important to stay in touch with what is happening and also what may happen in the future, even if it may take time for planning permission to be given, so as to get in on the ground floor of exciting potential developments.
If you are interested in buying property in Israel, or consulting with Creative Estates about the management of your investment property, we would be delighted to help you. You can contact us in complete confidence at contact@CEIsrael.com