Israel Land Authority (ILA) auctions for six lots in Shirat Hayam in southwest Netanya suggest that the neighborhood is set to become one of the city's most exclusive addresses with apartments likely to sell for over NIS 4 million. The neighborhood is near the cliffs overlooking the sea north of the Iris Nature Reserve and west of the Winter Pond Park and Agamim neighborhood. The new high-rise homes will be separated from the Mediterranean by a promenade and strip of hotels.
The new neighborhood will be built as two rectangles, between which there will be a street crosses it its length. The western border of Shirat Hayam will be a scenic seafront road, while its eastern border is Ben Gurion Boulevard. According to the plan, 27 towers of 16-19 floors with 1,842 housing units to be built on 126 dunams (31.5 acres). The current auction included land for 11 towers and 749 housing units. The average apartment area will be 115-127 square meters in five-room apartments, with parking and storage. The plan also includes five lots for public buildings and institutions, 5-8 floors high, and a lot intended for commerce, as well as extensive open public spaces.
The planning and proximity to the sea position Shirat Hayam as a potential future rival to Netanya's prestigious Ir Yamim residential neighborhood, located several kilometers to the south. The auction shows that the westernmost lots were priced significantly higher than the lots more inland adjacent to Ben Gurion Boulevard, which will have a more restricted view of the sea. The developers are paying NIS 1.8-1.9 million per housing unit (not including VAT and development costs) for the lots closer to the sea, while the lots more distant from the sea are priced at NIS 1.5 million per housing unit.
The auction attracted a major response in the current market climate from development companies, and 45 bids were submitted for the six lots. The winning companies offered bids of 60-70% of the appraised value, which is, about NIS 1 million per unit in the lots located in the eastern part of the plan, and about NIS 1.15 million per unit in the lots located in the western part of the plan, the first and second lines to the sea. The development costs add another NIS 200,000 per housing unit.
Real estate appraiser Moran Ganon observes that many residential towers and new neighborhoods have been built in Netanya in recent years. Just last year, an auction was held in the north of the city, in the neighborhood just south of Havatzelet Hasharon, on the border of Emek Hefer. The auction was part of the government subsidized Buyer Price Program, and bids reached NIS 900,000 per housing unit, some 10%-20% below the land price in the Shirat Hayam auction. Due to the special circumstances of a Buyer Price program in a neighborhood that is expected to be prestigious, this seems like a small difference. In 2018, several auctions were held for the Agamim neighborhood, east of Shirat Hayam, on the coastal highway, and prices of NIS 1.2 million were received for land for 120 square meter apartments. In other words, even compared with this auction, the lots in Shirat Hayam were sold at a low price. "It's possible that contractors anticipated the great difficulty in marketing to buyers, who have many alternatives due to the large number of residential towers being built in the city. Another possible reason for the 35% reduction in the ILA assessment is the high financing costs in the market today, and perhaps also due to unclear trends in the country." Ganon says.
For comparison, prices of second-hand apartments in nearby Ir Yamim, which tend to be large, currently sell for about NIS 35,000 per square meter. This is a price level that market sources believe Shirat Hayam's developers should have no difficulty in obtaining.
Published by Globes, Israel business news - en.globes.co.il - on August 28, 2023.
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