After 12,000 housing units have been marketed to contractors and developers through state tenders under the buyer fixed price program, exceptions are being made in the principle of restricting the tenders to those eligible. The Ministries of Finance and Construction and Housing have decided that some of the buyer fixed price tenders will include housing units that the tender winners can sell on the open market.
As of now, only a few tenders and a small proportion of the housing units from the potential construction in each tender are involved. Furthermore, as of now, only tenders in areas that without high demand are involved, and in places where the Ministries of Finance and Construction and Housing have come to the conclusion that the land discount and subsidy will not be enough to make the tender successful in the original format of 100% housing units for 100% eligible.
As of now, only tenders in question are in Beersheva, Sderot, and Tiberias, and in each of these, the number of housing units designated for those improving their housing is small, compared with the supply of housing units to people with eligibility. In Tiberias, for example, closing of the the tender for the Mul Arbel neighborhood is slated for tomorrow, and 16 of the 128 housing units that can be built according to the urban building plan can be sold on the free market. The ratio is higher in Sderot, where the two tenders published include a total of 937 housing units, 218 of which can be sold on the free market. In the case of Sderot, while one of the tenders allows housing units to be sold on the free market as part of the existing supply of housing units in the urban building plan, the second tender involves housing units that are the result of approval granted through administrative order, and are not part of the supply of housing at all. In Beer Sheva, where the complete tender booklet for the entire site, expected to include a total of 4,000 housing units, has not yet been published, 5% of the housing units (about 200) are involved.
A few months ago, when a buyer fixed price large tender in Rishon Lezion was published, the Ministries of Finance and Construction and Housing approved the inclusion of housing units for sale on the free market in the tenders, but these housing units were added to the urban building plan by administrative order. The Ministries of Finance and Construction and Housing emphasized at the time, and continue to state, that there was no change in trend, and that matters were being assessed at the plan progresses. The Ministry of Finance now explains inclusion of housing units to be sold on the free market in Beersheva, Sderot, and Tiberias as an attempt to make the tenders more financially worthwhile.
As of now, the housing units that contractors and developers can sell on the open market involve no commitment for price or restriction on selling to those improving their homes.
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2016
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