Prices in the Israel housing market have risen more than 20 percent over the past year, and the Bank of Israel is warning that a bubble will develop if they continue to rise at that pace, according to BuyItInIsrael.com and the Jerusalem Post.
At the end of July, the bank raised interest rates for the month of August to 1.75 percent from 1.5 percent to help stem the surge in home prices. The bank is expected to increase interest rates over the next year to 2 percent or 2.25 percent.
A directive was also recently issued to Israel’s banks, ordering them to examine their housing credit portfolio. Lenders are now discouraged from offering homebuyers loans for more than 60 percent of the value of a property, when before the directive they would lend up to 70 percent of the value. Therefore, banks are likely to demand buyers put in 40 percent of the property price, instead of the previous 30 percent.
Government-owned companies fuel price boom in China
State-owned companies in Beijing are bidding up prices.
State-owned companies in China are bidding up prices for big real estate projects unrelated to their core businesses, the International Herald Tribune reported. Records show that 82 percent of land auctions in Beijing this year have been won by state-owned companies that outbid private developers — up from 59 percent in 2008. One example is Anhui Salt Industry, which is now developing a complex of luxury high-rise buildings called Platinum Bay on a parcel it acquired last year, by outbidding two other developers to win a government-sponsored land auction. Other non-real estate companies are following suit. China Railway Group is developing residential complexes in Beijing after winning the auction for a massive piece of land there. A recent study by the National Bureau of Economic Research found that land prices in Beijing rose about 750 percent since 2003, and that half of that gain came in the past two years. The report attributed a large part of the increase to state-owned enterprises that had paid 27 percent more than other bidders for an otherwise equivalent piece of land. “These are the ones that have the money to buy the land,” Professor Deng Yongheng of the National University in Singapore told the Herald Tribune. “Because in China, it’s the government that controls the money supply and the spending.”
Moscow to host real estate exhibition
Moscow
The Russia Summit, an upcoming exhibition in Moscow, will be the first event of its kind to focus exclusively on helping overseas agents and developers market residential property to Russian buyers, organizers told the International Property Journal. The event, scheduled for Nov. 11 and 12, will bring together representatives of many of the top international real estate companies in Moscow, including Intermark Savills, Knight Frank Russia and Gordon Rock. “There are a number of successful international property shows in Moscow and St. Petersburg, but they are all aimed at the end consumer,” said Ashley Rigg, director of Globaledge.co.uk, which is co-promoting the event with Russia-based aiGroup. “There has never been anything focused on helping agents and developers both understand the market and, more importantly, meet local agents who can refer business.”
Compiled by Yaffi Spodek