The Ministry of Housing and Construction’s announcement that it intends to publish tenders for land zoned for 3,250 apartments under the “price for tenant” method ought to indicate a new surge in housing starts. However, it turns out that an internal failure in the current tender method sometimes resulted in contractors paying lower prices for land in regular tenders than the prices paid in “price for tenant” tenders, where there is a 50% discount on the price of the land per apartment.

An example of this is the Galei Carmel neighborhood in the Haifa suburb of Tirat Hacarmel, where contractors paid NIS 135,000 per land per apartment, including development, in regular tenders, and NIS 135,000 per land per apartment in “price for tenant” tenders. The price for land in the large “price for tenant” tender in Rosh Ha’Ayin, for 1,200 apartments, was sometimes higher than in recent regular tenders. Similar problems cropped up in a tender in the Haifa suburb of Nesher.

In “price for tenant” tenders, in which contractors compete on the lowest price per square meter for construction, half of the apartments are sold on the free market, and half are sold to eligible homebuyers, on the basis of current criteria. The criteria include number of years of marriage, families with three or more children, and, less importantly, military or national service…Read More>>

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