January 2010

January 2010

Housing in Karnei Shomron – A Broad Perspective

English speakers reside on all 3 hills in Karnei Shomron (Ginot Shomron, Karnei Shomron and Neve Menachem), with the main concentration of Anglo Saxon immigrants found in Ginot Shomron.

Karnei Shomron has a strong base of religious families, particularly in the Neve Aliza neighborhood of Ginot Shomron. The community boasts over 200 English speaking families. New immigrants from America will find vibrant community life, neighbors who come from some of the same communities in America, and children of all ages. Other neighborhoods in Ginot Shomron also have sizable numbers of Anglo Saxon religious immigrants.

The following is a brief overview of housing opportunities in Ginot Shomron, where most Anglo Saxon Olim live:

Neighborhood	Housing Description	Religious Orientation
HaNachal Road	Private homes overlooking the valley (Nahal Kaneh) - size of existing housing is varies widely, averaging about 2,000 square feet	Mixed – religious, traditional, and secular
Neve Aliza	Private, on half dunam lots – size of existing housing is generally more than 2,000 square feet	All religious
British Cottage	Attached homes – about 1200 square feet	Mixed – religious, traditional, and secular
Avrahami	Attached homes- about 1400 square feet
Caravans	Near the local country club just outside of Ginot Shomron – less than 500 square feet – for newly married couples
Chevrah LePituach	Attached apartments – about 1200 square feet
Shikun VePituach	Attached apartments – about 1100 square feet
Ashdar	Apartments in two story buildings – about 1000 square feet. Many upper floor apartments have been expanded to provide additional living area

The current political situation including the building freeze in Judea and Samaria has created the effect of reducing available housing options, making it harder for young couples from Karnei Shomron seeking first time housing as well as olim and Israelis looking for a quality community. However, with patience and persistence it is still possible to find housing. Despite the fact that the lack of new housing supply has caused housing prices to risen, housing costs in Karnei Shomron are still significantly below costs in nearby cities such as Kfar Saba and Raanana.

In the past few years, housing prices have changed from being listed in dollars, to being listed in shekels. For people whose income sources are in foreign currency, movements in foreign exchange rates may change their ability to afford housing. Overall, prices both for rentals and purchases have increased substantially over the past few years, because there is a steady demand for residences has not been matched by new building. In general, price increases for smaller units have been greater than for larger ones.

Much of the housing turnover occurs in the summer, in order to allow children to enter their new schools in September. The following table represents some apartments currently (January 2010) on the market for rent and purchase. Availability is fluid and the list is constantly changing.


Rentals: Current Asking Price for Ginot Shomron Apartments on the Market
Neighborhood/Housing Project		Rooms		Cost/Month (shekels)		Notes
Neve Aliza basement (of private home)		3		2'000		Apartment
HaNachal Road – smaller housing unit within private home		3		2,500		Apartment
Shikun VePtuach		3		2,500		Apartment
Ashdor		4		2,300		Apartment
For Sale : Current Asking Price for Ginot Shomron Properties
Neighborhood/Housing Project	Rooms		Cost (shekels)		Notes
HaNachal Road	7		1,400,000		Private home
Chevrah LePituach	5		800,000		Apartment
Chevrah LePituach	5		1,120,000		Apartment
Ashdar	4		530,000		Apartment
Avrahami	5		790,000		Attached home

Additional data may be obtained from the following local realtor:

Yossi Baal-Shem: Telephone: 972-9-7929932, 050-7546085

Additional costs of purchasing or renting include commissions paid to a realtor and lawyers fees.

Typical Realtor Commission:

Purchase: 2% of purchase price + value added tax (16% as of January 2010, but changes periodically) added to payment. For example, if the apartment cost 1 million shekels, the commission would be 23,200 shekels (2% of 1,000,000 plus 16% of 20,000).

Rental: the cost of one month’s rent plus value added tax. For an apartment renting for 2,500 shekels, the fee would be 2,900 (2,500 plus 16% of 2,500)

Typical Lawyer’s Fee: Purchase: 0.5% of purchase cost; Rental: one-half month’s rent. (lawyers are generally used in purchase agreements, but less so in rental agreements)

New Housing Options

The current building freeze in Judea and Samaria, creates difficulty for anyone attempting to obtain permits to build through the fall of 2010. However, it may be possible to obtain lots for building or purchase an apartment which is not affected by the building freeze.

Lots for building your own home exist in Ginot Shomron on HaNachal Road overlooking Wadi Kana. While the lots have all been sold, some of the owners are not building on them and want to sell them. These lots are available to all. The price of half dunam lots at the time of their initial sale was $40,000, which included all costs of developing the lot. The contact person for people looking to buy these lots from their existing owners is Arik Zorger of the Karnei Shomron Municipality, Telephone: 052-6162403.

Purchasing an existing new apartment in the Neve Menachem section – a total of 40 new apartments are available for purchase in a mixed (religious and non-religious) neighborhood, ranging from 3 to 7 rooms. This project is not affected by the building freeze. For more information, contact Arik Zorger of the Municipality (Telephone: 052-6162403). At the present time, a very limited number of native language English speakers reside in Neve Menachem. However, this is a relatively new and growing neighborhood.

Municipal Taxes

Residents, both renters and buyers, pay municipal taxes and fees.

These include:

Property tax – based upon the size of the dwelling, which costs about 31 shekels per meter per year. Thus, on a 100 square meter (1,200 square foot) dwelling, the tax would be 3,100 shekels (about $840) per year.

Water and Sewage Usage fees – which depend upon the amount of usage by family members and watering gardens. Low usage: should cost about 1,200 shekels ($320) per year. With high usage, it could cost 5 to 10 times as much.

Security Tax – Used to pay a security company which guards the entire municipality 24 hours per day. Cost: about 1,100 shekels ($300) per year).

Proximity to Work

Ginot Shomron is within commuting distance of jobs in the center of the country. The following are approximate commuting time by car to the following locations (public transportation takes somewhat longer).

City	Time Leaving Home	Time of Trip
Tel Aviv	Before 6:30 AM, after 9 AM	45 minutes
Tel Aviv	Between 6:30 – 9AM	1 ¼ hours
Jerusalem	Before 6:30 AM, after 9 AM	1 hour and 10 minutes
Jerusalem	Between 6:30 – 9AM	1 ½ hours
Petach Tikva	Before 6:30 AM, after 9 AM	30 minutes
Petach Tikva	Between 6:30 – 9AM	45 minutes
Herzelia Pituach	Before 6:30 AM, after 9 AM	35 minutes
Herzelia Pituach	Between 6:30 – 9AM	50 minutes
Kefar Saba	Before 6:30 AM, after 9 AM	20 Minutes
Kefar Saba	Between 6:30 – 9AM	35 Minutes

Mortgages

The building freeze should not present any obstacles for people buying existing homes to obtain a mortgage.

Mortgages in Israel are more complicated than they are abroad, where people take fix rate or variable rate mortgages and based upon the mortgage interest rate, know exactly how much they will pay per month over the life of the loan.

In Israel, extra complications exist. In addition to taking a fixed or variable rate mortgage, mortgage payments are linked to either:

· Changes in cost-of-living index (consumer price index)

· Changes in the value of foreign currency against the Israeli shekel

· Changes in the prime lending rate

As such, the monthly payment may fluctuate up and down over time, and one’s ability to make payments from current salary (which is generally not linked to the above factors) may change (see Table of Mortgage Repayments).

Taking a mortgage in Israel also requires paying insurance on the life of the borrowers (even if other life insurance exists) and the house structure (against fire, major plumbing damage, etc.).

The base mortgage that the government grants to a new immigrant out of its funds is very limited and will not come close to covering the cost of residence. Mortgage banks will be willing to increase mortgage size from their own funds, on condition that they are convinced that the borrower has the ability to pay. Ability to pay is measured by a number of factors, principally salary and financial assets.

Taking on a big mortgage is not cheap, and should be considered with the new immigrant’s starting salary and potential salary growth in mind. For example, a 20-year fixed rate mortgage of 450,000 shekels (about $120,000 based upon an exchange rate of 3.7 shekels to one dollar) carrying an annual interest rate of 5% will require a monthly repayment of about 3,000 shekels, or about $800 (plus a few hundred shekels more per year for insurance on the dwelling's structure and for life insurance)

Competition between mortgage banks is stiff, and banks will compete to win customers. A customer who shops around will find that it is possible to obtain lower interest rates, which will lower monthly repayments. Currently, 20-year fixed rate mortgages linked to the consumer price index are being granted at about 5% annual interest.

The following is a table of prospective mortgage payments:

Repaying a 450,000 shekel ($120,000) Fixed Rate Mortgage*
Monthly Shekel Repayment**	Duration	Interest Rate
3492	15 years	4.5%
2883	20 years	4.5%
3613	15 years	5.0%
3009	20 years	5.0%
3736	15 years	5.5%
3138	20 years	5.5%

* Assumes no change in linkage components (consumer price index, dollar, ect.)

** Changing the mortgage size causes the monthly repayment to change proportionally. For instance, the monthly repayment on a $50,000 mortgage will be half as much.

Housing Types and Prices in Karnei Shomron