Tuesday 28 May 2013

Silvan Shalom’s ghost apartments in Israel.

The Israeli government housing committee is making moves to reduce property prices and increase the number of rental apartments to the general public. At face value these are desirable goals. There is, however, a bogyman in the room.
On 22 May 2013, the Energy and Water Minister, Silvan Shalom, demanded action on what he called the 12,000 “ghost apartments” specifically located in Tel Aviv and Jerusalem. He was referring to vacation homes in Israel owned by people living abroad. Mr. Shalom can add the hundreds more such properties in Netanya, Caesarea, and Herzlia Pituach.
The decline in real estate sales seems to be forcing the Israeli government to lose touch with reality. Is Mr. Shalom not aware that many of the “ghost apartments” are owned by people living abroad who are planning and executing their complicated exit strategy from their mother countries in order to make a future Aliyah?  They are gradually cutting the Gordian knot consisting of professional, familial, and social responsibilities in order to come live in Israel. They are prepared to reduce their living standards and change their lifestyles here in Israel but they need time to make that move. In the meantime, they have committed financially by investing hard earned foreign currency into Israel by buying their dream home here. There is no logical reason why the Israeli government should turn that dream into the nightmare of ill-advised bureaucracy that will fail to achieve its illogical goals.
Silvan Shalom poured scorn on people who use their Israeli properties “sparingly.” The minister’s statement seemed to put these property owners to shame, inadvertently positioning them as acting immorally and against the best interests of Israel and Israelis. They are not.
What does he hope to achieve by this? That they will suddenly rent out their luxury, expensive, homes cheaply to young families? That he will force them to abandon their investments and sell their pricey, prime location, properties at vastly reduced prices? Is he not aware that the majority of people unable to get on to the property ladder will still be unable to pay the value of these quality homes. Neither will they be able to meet the mortgage payments for such properties.
In my professional experience local renters will be unable or unwilling to pay the high monthly Vaad or management fees on these properties. Usually, they have added facilities and demand a higher standard level of management care. They tend to be more labor intensive with daily, not weekly, cleaning of the common parts. Frequently there are facilities such as swimming pools, gyms, and saunas that require additional costs and expense.

Owners had no intention of renting to strangers when they took the decision to invest in their ideal home in Israel. They may be used for their family vacation use. They may be a first step in making their physical move to Israel, but they want their privacy, they do not want to rent out their homes, and they should not be punished for it.

Although they bought their homes here for positive and personally altruistic reasons, not for capital gain, they should not be forced to jettison their homes, their hopes and dreams in Israel, for the shortsightedness of the Israeli government.

 Barry Shaw is not only the author of ‘Israel Reclaiming the Narrative,’ he is the owner of Netanya Real Estate (www.netanyarealestate.com) with his wife, Carol.





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