Luxury homes: Jerusalem booms, Herzliya slumps

Azorim project in Hanevi'im Street, Jerusalem
Azorim project in Hanevi'im Street, Jerusalem

Tel Aviv still leads the market for homes costing NIS 10 million or more, while Jerusalem has pushed Herzliya firmly into third place.

A substantial wave of deals lately in the luxury housing market in Jerusalem, at prices over NIS 10 million, puts the city second after Tel Aviv for the number of luxury deals in the past eighteen months, "Globes" finds.

Tel Aviv continues to lead the luxury housing market in Israel, and has even consolidated its position in this respect. On a multi-year average, 50-60% of the deals in this market take place in Tel Aviv, which generally also leads in the prices of the properties sold. Herzliya, which traditionally competes with Jerusalem for the number two spot, has been firmly pushed down into third place in the past eighteen months.

Luxury has various definitions, that include location and technical specification, but for the sake of simplicity we define this market as consisting of homes costing NIS 10 million or more. The proportion of such homes in the housing market as a whole is about 0.5%, and, as mentioned, they are mostly found in Tel Aviv.

Herzliya and Jerusalem generally account for about 15% each of the luxury home deals. The remainder are distributed around various cities, generally in the Tel Aviv area and the Sharon.

From "Globes’" inquiries it emerges that of 434 luxury deals carried out from January 2023 to the end of June this year that have been registered with the Israel Tax Authority, 256 (59%) were in Tel Aviv, 89 (20.5% ) were in Jerusalem, and 31 (7%) were in Herzliya. There were 58 luxury deals in other places, headed by Ramat Hasharon (12), Ra’anana (10), Netanya (8), Ramat Gan (6), and Givatayim (5).

That Tel Aviv heads the luxury home table is very natural, or at least has been so since the beginning of the present century. Ten years ago too it topped the table as well, with 50% of the deals.

The steep rise in home prices in Tel Aviv has increased its weight in the luxury home market. In 2020, 52% of the luxury home deals took place in Tel Aviv. In 2021, the proportion rose to 58%. In 2022, when there was a substantial slowdown in the Tel Aviv housing market, its share of the national luxury market fell to 50%, but, as mentioned, in the past eighteen months it has recovered to 59%.

Foreigners flock to Jerusalem

Jerusalem has seen a large wave of home purchases by overseas residents, which has contributed to its rise in the luxury market table.

The peak of purchases by overseas residents in Israel was recorded in 2005-2006, amounting to over 5,000 homes in each of those years. Since then, the number of such deals has declined, amounting to 1,000-2,000 in the past few years.

Something has changed, however, in the pattern of these purchases. In the past, a third of purchases by overseas residents were in Jerusalem, but lately the proportion has doubled, and some of these purchases are at the luxury end of the market, although by no means all of them.

In November 2023, "Globes" reported on a phenomenon that had begun before the war broke out, whereby overseas residents organize to buy together apartments in new projects in the same week and sometimes even on the same day. This happened, for example, in the Midtown Jerusalem project of Israel Canada and the 12 Sarei Yisrael Boulevard project of AR Best Properties.

In the Midtown Jerusalem project, eight apartments were purchased on October 17, twelve were purchased on the following day, and another eight were purchased a week later.

Azorim’s day came on December 21, when it sold no less than 16 apartments in the project it is constructing at 27 Hanevi’im Street in Jerusalem at prices of over NIS 70,000 per square meter. Nine of the apartments crossed the NIS 10 million threshold.

Sources in the Jerusalem real estate market say that this is not happenstance, and that groups of religious Jews from abroad, mainly from the haredi community, are buying together many apartments in the city, apparently because they sense growing antisemitism in their countries.

Herzliya sales slump

On the other side is Herzliya, a city that attracts real estate investments by overseas residents very different from those who buy in Jerusalem. Investments in Herzliya signify economic globalization, the integration of Israeli companies into international markets, and involvement of international financial bodies and others in Israel.

Only 31 luxury deals in Herzliya were registered with the Israel Tax Authority between January 2023 and June 2024, amounting to 7% of all luxury deals in Israel in that period. For the sake of comparison, in 2022 there were 61 deals of NIS 10 million or more in the city, amounting to 12.5% of the total luxury market.

That the numbers are down is apparently an indication that the direction that the country and the local economy have taken, and especially what has been happening here since the outbreak of war, do not attract overseas residents of the type who would buy properties in Herzliya in former years.

Published by Globes, Israel business news - en.globes.co.il - on July 16, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Azorim project in Hanevi'im Street, Jerusalem
Azorim project in Hanevi'im Street, Jerusalem
Unframe founders credit: Yossi Yarom Israeli AI enterprise platform co Unframe raises $50m

Unframe’s turnkey AI solutions enable companies to solve any enterprise AI use case at scale with fully functional, customized AI solutions for businesses in a matter of hours, rather than months.

Combatica credit: Combatica Combatica launches next-gen VR AI training platform

The Israeli company's virtual reality platform includes 50 AI generated scenarios, seven maps and even situations for operating night vision.

Shekel credit: Shutterstock Vladirina 32 Shekel volatility after US tariffs announcement

The shekel is weakening sharply against the euro, which is gaining following the unveiling of Donald Trump's tariffs plan.

Minister of Finance Bezalel Smotrich credit: Noam Moskovitz Knesset Spokesperson Treasury assesses potential damage to Israel's US exports

Israel will be charged a higher tariff on its exports to the US - its biggest export customer - than Turkey and the UAE.

Iranian flag credit: Shutterstock Why inflation haunts Iran

With a month-on-month increase of 3.3% and an annual rate of 37.1%, inflation reflects the struggles of millions of Iranians.

APM merges with lawyers from Doron, Tikotzky Kantor, Gutman credit: Eyal Merilos APM merges with 12 lawyers from Doron, Tikotzky Kantor, Gutman

With the addition of these 12 lawyers, Amit Pollak Matalon & Co. will now have 135 lawyers.

US President Donald Trump credit: Reuters Sipa USA Israel on list as Trump unveils tariffs

Relatively low reciprocal tariffs will be imposed on Israeli goods sold in the US.

Deflated unicorn credit: Shutterstock Big Tech 50 reports more huge falls in startup valuations

Israeli R&D partnership Big Tech 50 reports that an investment of $2 million in Orcam made in 2021, shrank to just $31,000 at the end of 2024.

NextFerm technologies based on yeast credit: NextFerm Food-tech co NextFerm suspends operations

The company, which produces food ingredients in yeast without genetic engineering, cannot pay its debts and is seeking a buyer.

Minister of Finance Bezalel Smotrich credit: Shlomi Yosef OECD sees recovery in growth but high inflation

The OECD Israel Economic Survey 2025 recommends that the Israeli government take several restraining measures, in order to exit the economic storm created by the war.

Dano Ben-Hur credit: Dror Sithakol Statisticians contradict BoI on impact of housing finance deals

The Central Bureau of Statistics insists the impact of 20/80 buy now pay later financing deals on the real estate market and housing prices is minimal.

Governor of the Bank of Israel Amir Yaron  credit: Government Press Office Debt fears top Bank of Israel's concerns

Most unusually, Governor of the Bank of Israel Amir Yaron's press conference last week did not focus on inflation and the impending interest rate decision.

US President Donald Trump  credit: Reuters/Leah Millis Israel moves to avoid Trump's tariffs axe

Minister of Finance Bezalel Smotrich has signed an order canceling all tariffs on imports from the US. The impact will mostly be on agricultural produce.

Forbes Rich List credit: Shutterstock Maslowski Marcin Wiz founders ranked in Forbes 2025 Rich List

There are a few dozen Israelis listed in the 2025 Forbes Real-Time Billionaires List including Wiz founders Assaf Rappaport, Yinon Costica, Roy Reznik and Ami Luttwak.

SatixFy CEO Nir Barkan credit: Ariel Barkan Canada's MDA Space to buy Israeli satcom co SatixFy

MDA Space will pay $269 million for the Israeli company, including taking on a $76 million debt and a 75% premium on SatixFy's closing price on Nasdaq yesterday.

Raising dollars credit: Shutterstock Israeli startups raised over $1b in March

Israeli privately-held tech companies have raised $2.1 billion in the first three months of 2025, according to IVC-LeumiTech, up 24% from the corresponding quarter of 2024.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018