New Housing in the Works: Government Land Sales Up 90%

More than half the land sold for housing is in north.

Land sales for housing construction jumped 90% between January and August 2013, compared to the same period last year, according to Israel Land Authority figures.

The ILA sold land for the development of 21,755 housing units from January to August this year, compared to 11,506 housing units during the same period last year and 15,500 housing units in all of last year combined, the figures show. ILA sources estimated that land for the construction of 30,000 housing units will be sold by the end of the year.

The ILA is the government body responsible for managing the vast bulk of Israel's land, which is owned by the state.

Peak land sale activity occurred in January this year, when land for 8,000 residential units was sold, including tenders for 4,600 units in the community of Harish and 1,200 units in a new neighborhood on the outskirts of Haifa. The three following months also saw high volume of land sales, amounting to close to 3,000 housing units per month. During the May-August period, the volume of land sales declined to 1,000-2,000 housing units per month.

Not included in the ILA figures are the special agreements (referred to in Hebrew as roof agreements) formulated by the ILA in cooperation with the Finance Ministry to bring another 40,000 housing units onto the market in Modi'in, Rosh Ha'ayin, Kiryat Gat and Kiryat Moztkin. The agreements are intended to speed up project construction schedules by bringing together the various government ministries to approve the construction of necessary communal infrastructure and remove obstacles to building new communities.

The geographical distribution of the land deals shows that roughly half occurred in Israel's northern regions. In the Haifa District, which includes the community of Harish, land for 6,400 housing units was sold. In Israel's Northern District, land for 4,500 housing units was sold. By way of contrast, in Israel's more populous central regions, land for 2,800 housing units was sold in the Central District and just 900 housing units in the Tel Aviv District. Together, land sales in the last two districts comprised just 17% of the total for the January-August period.

The relatively small percentage of land sales in Israel's high-demand central regions is partly due to past government policy restricting planning of new residential areas in the country's center and increasing such efforts on its geographic periphery, said the head of the business division at the ILA, Shay Yiftach. While this policy has since changed, the previous policy still affects land sales due to the length of the planning process, which can take years.

Hagai Frid