An apartment in Tel Aviv's Akirov Towers was recently leased for NIS 25,000 a month. The 190-square meter four-and-a-half room apartment with a 14-square meter balcony with a sea view is on the 26th floor in one of the project's three towers. The apartment was leased by a US businessman who is moving with his family to Israel.
Rozio Real Estate CEO Assaf Rozio, who brokered the deal, says that the tenant is paying 25% above the average rent in the tower, partly because the apartment is unfurnished, but also because it was has never been leased.
Rozio added that there has been a slowdown in the high-end homes market, partly because of the real estate tax measures in the Economic Arrangements bill, which include a new tax bracket, of 8%, on the purchase of homes for more than NIS 5 million, cancellation of the betterment tax break, and double arnona (local property tax) on apartments which are empty for most of the year.
Rozio said that the tighter terms on investment in real estate by foreign residents have increased demand for renting luxury apartments. "In the past few months, we have seen a sharp rise in the number of rental transactions for luxury apartments," he said. "These are mostly by Jewish businesspeople from countries such as the US and countries of the former USSR, who put their money in investment channels which give them a higher return, so investing in an apartment does suit them.
"These people prefer to pay high rent, to maintain the standards to which they have become accustomed, and to keep the option of upgrading the apartment every few years. Rent ranges from NIS 20,000, to NIS 100,000 for a 350-squre meter triplex with a private pool and private elevator in the W Tower in Park Hatzameret."
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2013
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