Israeli investments in New York recorded a dramatic increase of 25%
Housing prices in Israel continue to soar, pushing
Israelis to invest in real estate overseas: Israeli investments in New York
recorded a dramatic increase of 25% last year.
Throughout 2012, Israelis bought 300 apartments in New
York City, particularly in the Harlem neighborhood and northern Manhattan,
estimated at a total value of some $500 million. In addition, Israelis
purchased commercial real estate in the Big Apple for a total of $400 million.
These are not just private investors, but companies and
institutions as well.
"It's a great concern," a senior Housing
Ministry official told Yedioth Ahronoth. "The new government must restore
investors' faith.
"The Treasury drove investors and their money away
from Israel, and rent prices jumped up. Now, the capital for investment in
housing in Israel's big cities must be returned in order to increase the supply
of apartments for rent. It's the only way to bring rent prices down."
According to Jacky Mukmel, CEO of MAN Properties which is
affiliated with the world's largest commercial real estate agency – CBRE Group,
dozens of Israeli businesspeople have discovered New York's potential in the
field of commercial real estate in the past year, particularly in shopping
centers and offices.
In the apartment area, estimates are that about 80% of
the Israelis bought the New York flats for investment purposes, while the rest
purchased them for accommodation during business trips to New York.
According to Shimon Shkury, president of Ariel
Properties, which invests in New York on behalf of its Israeli clients, the
number of Israelis entering New York's real estate market as investors has been
on the rise since 2008.
"The Israeli investors can be divided into those who
are interested in small investments, purchasing one apartment or two, and those
who join purchase groups with local entrepreneurs, some of whom are former
Israelis, and buy apartment buildings together," he said.
Ariel Properties' figures show that the number of
transactions in the market of apartment buildings for investment purposes in
New York increased by 36% in 2012. A total of 639 transactions were carried out
throughout the year, which included the purchase of 964 apartment buildings at
a total sum of $7.8 billion.
This number reflects a sharp rise from 2011, which
recorded a total of 470 transactions in which 679 properties were sold for a
total of some $5 billion.
According to Shkury, the main reasons for the rise in
sales of apartment buildings for investment purposes in New York is the
significant increase in rent, as well as the mortgage interest rate which is at
an all-time low.
In order to speed up construction for Israeli investors,
Hap Investments has hired world renowned designer Karim Rashid and is offering
apartments in northern Manhattan for $320,000 and more.
According to CEO Nir Amsel, the supply of apartment for
sale in Manhattan reached an all-time low in the last quarter of 2012 with
4,749 apartments for sale compared to 7,221 in the same quarter the previous
year – a 34% drop.
The supply of new apartments plummeted as well, from
1,490 in the fourth quarter of 2011 to 882 in the fourth quarter of 2012.
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