Most Land Israel Sold for New Homes in 2014 in West Bank or East Jerusalem

Steep drop in new construction in center of country and around Tel Aviv where demand for housing is higher.

Nimrod Bousso
Nimrod Bousso
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Section of Israeli separation barrier close to Jewish settlement near Jerusalem
Section of Israeli separation barrier close to Jewish settlement near Jerusalem Credit: Reuters
Nimrod Bousso
Nimrod Bousso

The Israel Lands Authority published tenders for land to build some 3,050 residential units in the first quarter but only 45 units are in the center of the country and 55% are in the West Bank or East Jerusalem.

The land sales reflect an annual pace of 12,000 new units, which is considered very low and casts serious doubt on the government’s ability to meet its housing-supply targets for this year, especially in areas of high demand near the center of the country. This is particularly embarrassing for the ILA and the Housing and Construction Ministry, which set optimistic new-construction targets for 2014.

The sole land tender in the center of Israel was for 126 units in Tel Mond northeast of Tel Aviv.

But since January 1, land for some 700 units was sold for construction in West Bank settlements, around 23% of the total. Another 966 units, or 31.5%, were in Jerusalem.

All the units marketed for new construction in Jerusalem were in neighborhoods over the Green Line that were annexed to the capital after 1967 – Pisgat Ze’ev, Ramot, Ramat Shlomo and Neveh Yaakov – based on an analysis by the TheMarker of the figures released by the ILA.

All told, some 55% of all new tenders conducted by the ILA were for land over the Green Line.

Also in the first quarter, the ILA published tenders for building 411 homes in the south, or 13.5% of the total. The tenders were for land in Netivot, Be’er Sheva and Dimona. In the north, the ILA tendered land for 538 units, or 17.6% of the total, with almost half of them, 268, in a project for rental apartments in Haifa.

The figures point to a trend in building in the West Bank under Housing Minister Uri Ariel, who is also chairman of the ILA’s council and the minister who oversees the ILA.

The new figures are similar to those released at the beginning of the month on housing starts last year, which showed a rise in starts but a steep drop in new construction in the center of the country and Tel Aviv, where the number tumbled 50%.

Jerusalem also stood out for its large number of starts – 3,430 in the first three months of the year. In the West Bank the figure was 2,534, a 124% increase from the same time in 2013.

The ILA defended the latest sales, saying the figures did not include the sale of land exempt from tenders and that total marketing of land came to some 4,000 residential units.

The Housing Ministry promised that the sale of state land for housing this year would be significantly higher than in 2013, when it reached the equivalent of 38,000 housing units.

“Traditionally, at the beginning of the year the quantity of sales is lower, while at the end of the year it rises and reaches its peak with all the sales that have come to fruition – and that is what will happen in 2014,” the ministry said.

“Some of the sales have even been waiting for the plans for low-cost housing that have been developed. In light of their implementation in the coming months, significant and large sales will be available with an emphasis on areas of [high] demand.”

The ministry said this will let Israelis enjoy the benefits of plans to exempt new homes from value-added tax and the plan for setting low target prices for new homes in upcoming land tenders. By the end of the year the ministry plans to sell land for 1,850 homes in Modi’in, 3,000 in Rosh Ha’ayin, 2,000 in Kiryat Bialik, 3,000 in Harish and 2,000 in Kiryat Gat – all towns in the center of the country.

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