The Real Estate Israel market has many questions. Anyone wishing to buy an apartment in Israel legitimately asks many questions, related to the budget, the city, the neighborhood, the seriousness of the developer, the quality of services, the return on investment, etc … It is a question that raises legitimate doubts: buy an existing property, or a property on plan?
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Israel Real Estate – The purchase of an old apartment is often the result of a lack of trust in Israeli developers
The purchase on plan is regulated by many “safeguards”
In addition, many safeguards were instituted by law, in order to protect the purchasers against possible abuses, delays or poor workmanship, or other difficulties that may arise.
Thus, the promoter has the obligation to provide bank guarantees proving its solvency and its solidity. Penalties are due by the purchaser in case of delay in delivery, and like the OECD countries of which Israel is a member, there are guarantees of poor workmanship.
The quality of the services, the materials used, the technology, and the building standards, evolve in Israel faster than anywhere else.
The old buildings were built in the urgency of the years 1950-60 on stilts, without elevators, without carparks, often without balcony, without safety rooms.
To buy an old apartment is to condemn oneself in the short term, to internal and external renovation work.
New buildings, in addition to the modern character of their services, offer greater security. They are in compliance with anti-seismic standards, and each apartment has a “Mamad” or security room.
This is why a “cultural and technological” gap separates constructions dating back 50, 30, or 10 years, from those that will come out of the ground in 2017, 2018, or 2020.
The prices of old and new are almost identical, especially in cities like Tel Aviv, where location is a determining factor in the price.
For this reason, we tend to prefer to invest in the old, immediately generating rents. It does not take into account the costs of renovation and facelift that will be required after a few years.
The purchase on plan shifts certainly the production of rents, a loss of profit largely compensated by the absence of future costs of renovation.
Modern services that contrasts with the condition of old buildings
It offers a modern living environment, like the many condominiums of 25 floors, designed on the American model, allowing apartments on high floors, access to the sea view, without having to pay the price per square meter of a first line-sea.
The purchase on plan also allows greater flexibility in the choice of materials and interior design.
The quality of the services, the amenities – parking, elevators – guarantee a fast rental, and a higher rental yield.
Developers often offer to buy under pre-sale conditions, thus guaranteeing a low price, but also advantageous terms of payment (20% upon signature, 80% upon delivery). Solutions that immobilize less capital, and limit the loss of purchasing power generated by the weakening of the Euro against the Shekel.