Bat Yam seafront homes priced like Tel Aviv

Bat Yam coastline Photo: Shutterstock ASAP Creative

The luxury housing market in Tel Aviv's southern neighbor has been growing in leaps and bounds.

Sea Park, the new neighborhood currently under construction in Bat Yam, is just beginning, but there are already many people willing to pay millions of shekels for apartments there. The location is becoming the most expensive part of the city.

In contrast to other cities, luxury housing did not exist in Bat Yam until recent years. Up until 2012, a mere handful of housing deals there were priced at NIS 3 million or more. Since then, however, the luxury housing market in the city has been growing by leaps and bounds, reaching a peak of 61 deals in 2017 and falling to 52 deals in 2018.

Despite the drop in the number of deals, Bat Yam saw its first deal for over NIS 10 million last year. Two deals were signed in a project of Property and Building group subsidiary Nave in the northern part of Sea Park: one for NIS 15 million and the other for NIS 10.25 million.

The more expensive penthouse has 300 square meters and the less expensive one 180 square meters. Nave CEO Avi Rosen says that marketing of the third penthouse in the company's building has not yet begun, although the building has already been occupied for two years.

"We held back marketing until prices rise"

"We marketed the building in several stages, starting a few years ago. The penthouses and luxury apartments on the high floors were not included in the early stages, because we made a strategic decision to hold back marketing until we felt that we could get a suitable price for them," Rosen says. "Bat Yam is constantly developing. Prices are continually rising. The prices that you get now in the city were not available two years ago."

"Sea Park is pushing Bat Yam up on the price scale, and not just in the luxury market. Until recent years, housing prices in the city were 20% lower than in Holon. Today, they are fairly equal, and sometimes even higher than in Holon," says appraiser Iris Kadri-Shmulevitch.

New towers and a sea view are the two main elements of luxury in Bat Yam. The first high-rises in the city, located mainly in Sea Park, which is bordered on the south by Rishon Lezion, have 30-40 storeys, and the developers made sure that they would face the sea. Anglo-Saxon Real Estate Bat Yam franchise holder Sammi Knafo says that four-room apartments in the project reach prices of NIS 2.7-2.8 million, and NIS 3-3.1 million on the upper floors. "This site is almost as good as Park Tzameret in Tel Aviv, but with far lower prices," he says.

"People came here to buy an apartment in a luxury tower with a sea view, not because of the city's reputation, says Kadri-Shmulevitch. "They were willing to pay the price here because they knew that a comparable apartment in Tel Aviv will cost three times as much," Rosen adds.

Sea Park is planned to eventually contain 50 towers, only one fifth of which are already under construction. The buyers are a diverse group, with some being move-up buyers from central Israel, usually older, who sold their homes and want to move to a prestigious tower at relatively low prices. Others are foreign residents and members of buyers groups who are developing several towers in the area. Wealthy Bat Yam residents are also gradually entering the towers.

Developers of small projects along the Ben Gurion and Shai Agnon arteries on the second line from the sea are getting NIS 3.1-3.2 million for four-room apartments. "A few years ago, prices there were NIS 2.6-2.7 million," Knafo says.

"Bat Yam will become the new southern Tel Aviv"

The big boom in prices is taking place at a time when general real estate prices in Israel are treading water, thereby lending force to the theory that there is a connection between the price surge in recent years and the declaration by Minister of the Interior Aryeh Deri about combining the Tel Aviv and Bat Yam municipalities in 2023. "I'm not sure that this will happen, but everyone's talking about it, and even if these expectations can't be quantified in economic values, it's clear to me that people themselves are making calculations," says Kadri-Shmulevitch.

"Anyone with capable of telling his right hand from his left realizes that once Bat Yam is connected to Tel Aviv, it will become the new southern Tel Aviv, and this will make an enormous contribution to its image. It's no secret that Bat Yam still has a poor image. This connection will soften it," Knafo sums up.

Encouraging Tama 38 demolition and construction

The Bat Yam municipality is also contributing to expansion of its towers through its Tama 38 policy. Two plans, BY/538 and BY/580, give priority to the demolish and rebuild version, among other things by allowing developers to build small apartments averaging 60 square meters in the new projects, including security rooms.

This is making the projects more worthwhile and increasing the developers' profits, thereby raising apartments prices in places zoned for Tama 38, mainly in the western part of the city on Herzl Street and Jabotinsky Street.

An old and plain three-room apartment on Ha'Atzmaut Street in a building with six apartments was sold for no less than NIS 2.2 million, because the developer is promoting a plan to build 38 apartments through Tama 38 demolish and rebuild.

Is it all happening because of Sea Park? Do the price rises also possibly reflect an element of speculation about Bat Yam becoming part of the Tel Aviv? Could it be an extreme case of a bubble in the city? The special process taking place in Bat Yam is only beginning, but there is no doubt that something worthy of keeping track of is going on there.

Published by Globes, Israel business news - en.globes.co.il - on May 14, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Bat Yam coastline Photo: Shutterstock ASAP Creative
Bat Yam coastline Photo: Shutterstock ASAP Creative
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