MONEY IN THE MORNING, CHAIRS IN THE EVENING
The Gilo district of Jerusalem is comfortable, modern, and beautiful, but every Israeli knows that prices there are lower than in any other district of the Israeli capital. This district is occasionally shelled by terrorists, while the neighboring district – for example, Neve Yaakov – is not.
In the north of the country there are two towns located nearby: Kiryat Shmona and Metula. In Kiryat Shmona, real estate prices are 30% lower than in Metula. It's simple: Katyusha rockets from North Lebanon reach this populated area, but they do not reach Metula.
It is believed that with the start of the Arab intifada, activity in the housing market dropped sharply. Uncertainty about the future appeared, and such a psychological attitude immediately affects the real estate market.
Studies in Beersheba, Gush Dan, Eilat, and Netanya have shown that since the unrest in the "territories" began, not a single "second-hand" apartment has been purchased with the aim of profitably investing money. People, as has happened more than once in Israel's history, do not want to take risks.
Over the past six months, only 406 apartments were sold on the secondary market throughout Israel: 231 were bought as a first apartment by young couples and new immigrants. 128 apartments were purchased as a second apartment by those who managed to sell their first one. 47 apartments were bought as a second apartment while retaining the first. It is believed that this category of the population – owners of two apartments – has a hard time. They are inevitably in a double bondage of loans and taxes.
This, it seems to me, is not entirely true, since prices for purchasing housing are falling. But rents are rising. And the owner of two, three or more apartments rents out the vacant housing, earning a substantial profit. Moreover, one can get money from a bank against the collateral of an apartment and acquire another property. Then rent out one of them.
For example, we rent a four-room apartment in Holon, not far from Tel Aviv, for $600 a month. The owner of this apartment works relatively far from Holon and rents housing near her work herself. The money we transfer for rent, she immediately sends to the bank account of her landlord.
Many owners of "excess" real estate in Israel live comfortably on rental income. Not necessarily apartments. Warehouse and industrial facilities, premises for restaurants and shops are often rented out. In the center of the country, renting a decent hall for a restaurant with an area of 100-200 square meters costs no less than $3,000-5,000 per month. For a square meter of warehouse space, the tenant will pay approximately $7 per month.
Renting requires "live" money, but Israelis typically buy apartments on credit. You can acquire a solid dwelling by paying only $5,000 or, in some cases, only $1,000. The bank will lend all the rest of the money – naturally, at a certain interest rate – for 20-30 years. New immigrants can obtain a subsidized loan (mashkanta), but it is not large, and the remaining necessary funds have to be made up with loans at extortionate interest rates. As a result, the borrower fully pays for his dwelling in the first ten years, and the rest of the time works for the prosperity of the banks.
Sitting in a mousetrap of debts, the client begins to get very nervous. Today he has a job, but what will happen tomorrow – no one knows. You can successfully pay the banks for an apartment for many years and lose it, losing all the amounts paid, as soon as the ability to make interest payments on the loan disappears. The unfortunate person sells the apartment, somehow pays off the debts, and again becomes a member of the troublesome family of tenants. There are many such examples in Israel.
WOE TO THE RECKLESS
The expensive real estate market in the country also attracts fraudsters of various kinds. Often very professional and even talented.
A case from life. Two elderly men met by chance in a park and took a great liking to each other. It was something like deep sympathy at first sight. The fact is that Israelis are an extremely politicized people, and if their views on the Arab-Israeli conflict coincide, they immediately begin to love and respect their interlocutor. So these two, one of whom was straightforward and the other cunning, became close in an hour of conversation. It immediately turned out that the cunning one had nowhere to live, while the straightforward one was being sent on a two-month business trip to Europe. So on their second meeting, the straightforward man offered his new friend the key to his apartment, thereby demonstrating natural kindness and active concern for the fate of his neighbor.
Two months later, the straightforward man returned safely from his trip and found his apartment occupied by complete strangers. The cunning man had rented it to them and received payment six months in advance, amounting to $3,000. He cobbled together the contract himself and even attached a state duty stamp to it.
Another typical trick: selling an apartment or cottage encumbered with debts. You buy your desired, cozy, inexpensive little nest – and suddenly it turns out that your purchase has long been mortgaged and remortgaged, and you will have to pay much more for it than you expected – or part with it.
It should be remembered that in Israel a frivolous approach to acquiring real estate is absolutely ruled out. Spending hard-earned money on buying an apartment or house without a broker and a lawyer is extremely dangerous. A broker will take 2% of the purchase price, a lawyer – 0.5%, but you cannot do without this "extra expense".
Moreover, the broker should not be a random person. Recommendations and his official status are necessary, and the lawyer in the purchase deal should be your own lawyer, not a friend of the seller of the property.
UNDER THE BANNER OF PRIVATE PROPERTY
As a rule, old housing stock is someone's property, and problems with demolishing slums constantly arise. Owners are in no hurry to sell what they own, even when they don't live there. In Israeli cities, there are many shabby ruins next to luxury new buildings. This means only one thing: the owner of this eyesore is waiting for another rise in real estate prices. Sometimes even highways have to be laid around the foundation of someone's shack. Especially often, Arabs are in no hurry to sell their property "on principle."
Huge sums of money had to be invested to clear the space where the magnificent Tel Aviv promenade now stands. But even here, after going around another first-class hotel, you can come across a pathetic shack of "Uncle Pumpkin." Nothing can be done: the right of private property is inviolable, despite the fact that 91% of Israel's land belongs to the state. The lease agreement is sacredly observed.
Land ownership still saves the country's budget. The institution of leasing brings a solid income to the state, where, as everywhere in the world, they don't really like paying taxes.
Land is provided to building contractors (kablanim) on a long-term lease for 49 years and is very expensive. Hence the absurd housing prices, especially in the center of the country. Year after year this problem is discussed in the Knesset, but no one sees any other stable opportunities to replenish the state treasury in a country with a well-developed system of social benefits, allowances, and expenses for absorbing new immigrants – in a country that has essentially been at war continuously for 53 years. (By the way, "movable property" in Israel – cars – also costs a lot. The reason is the same: a purchase tax that goes to the state.)
What saves the country's population is that, with well-established agricultural production, food prices are low.
Once I talked to a young person without a fixed place of residence. This ideological bum was not a drug addict, a drunk, or a beggar. An heir of hippies and Diogenes slept on the Tel Aviv beach in a sleeping bag and ate, according to him, on ten shekels a day (which is a little more than two dollars). Moreover, this cheerful vagrant and poet did not look emaciated or exhausted.
Currently, the possibility of building "income houses" by the state is being actively discussed. Apartments in these houses at preferential prices should be provided for rent to the "weakest" segments of the country's population. The idea is considered timely, but for now it exists only at the project level.
P.S.
But in reality, the true real estate of Israel is the desert. It is the only reserve of silence, peace, and stillness, the lungs of the country and its soul.
In the Arava desert, near Eilat, lies Kibbutz Yahel. A Thai man named Lidong works there. When he was asked why citizens of Thailand seek work in Israel, while Israelis don't go to Thailand to earn money, he replied: "Thailand is a small country, and we have very many people. Israel is a very large country, and there are few people in it." And indeed, around Kibbutz Yahel, for many kilometers there is nothing but rocky desert. There, Israel, which you can't find on every map, seems huge.
The tiny settlement of Shahrut in the desert was created by one man named Sefi. An ordinary sabra (a native of Israel), with "Russian" roots, born and raised in the city, he fell in love with the desert in his youth. Sefi went to study with the Bedouins. For three years he lived with them, for three years he looked closely, observed, tried to master the science of desert life that the Jews had long forgotten. As a result, Sefi combined the Bedouin's ability to survive in extreme circumstances with the Jew's desire to move forward, to improve the living environment.
In the fourth year, Sefi left the "children of the desert," having finally decided that he had the full right to a new "adult" life. He began this life by enlisting the support of the state. He rented land on preferential terms, got to water, of which there is plenty in both the Negev and the Arava desert. True, this sea of water exists deep underground and needs desalination, as it is saturated with salts. Sefi built several kilometers of a real, asphalt-covered road to the place where he planned to found his settlement and his business: a tent under the nearby stars for receiving guests.
Having dared to settle in the desert, Sefi conducted an experiment – on himself and on those who would agree to live next to him. There are not so many places in Israel where a person can be alone with nature. Sefi's tent, excellent kitchen, camel farm for tourists – all these are "frills" of Sefi's real "soulful" business. He opened a whole school for managers and for those who still only want to manage people. He leads such a group into the desert and makes his "students" sleep in sleeping bags under the open sky, cook food over a fire, and save every sip of water.
A well-to-do city dweller instantly loses his bearings in space and time. Without television, radio, newspapers, and telephone, he is as if transported to the past, to the shadows of his ancestors. Sefi is inseparably with his charges. He carefully observes them and at the end of the route unobtrusively gives each of them his recommendations.
Sefi himself created his own real estate in the real estate of the desert. He found a fulcrum capable of helping someone who is going to turn the world upside down.