Home sales slump in Israel's biggest cities

Construction in Jerusalem  / Photo: Shutterstock, Shutterstock.com
Construction in Jerusalem / Photo: Shutterstock, Shutterstock.com

The number of annual real estate deals has fallen in recent years in Jerusalem, Tel Aviv and Haifa, the Madlan website reports.

A slump in the number of deals in Israel's big cities and a slump in the luxury housing market and price rises by tens of percentage points in many cities - these were the more outstanding findings in a report of Israel's real estate market over the past decade by the website Madlan.

Madlan CEO Eitan Singer explains that his company gathers data about the real estate market for a range of sources including deals published by the Israel Tax Authority, data from the Central Bureau of Statistics, the number of Airbnb apartments in every neighborhood, and more.

Jerusalem losing ground

According to the Central Bureau of Statistics, Israel's population grew 19% over the past decade - but Madlan's data shows less deals in Israel's biggest cities.

Jerusalem, Israel's biggest city, had the largest number of deals but it lagged behind population growth. For example in 2010, Jerusalem's population was 40% larger than Tel Aviv yet there were 10% more deals in Tel Aviv.

Madlan believes that this was due to the unique characteristics of Jerusalem - a large young population, illegal construction, and the Arab sector where young adults live with their parents until they get married.

In Tel Aviv itself, the number of deals annually has fallen from 6,686 in 2010 to just 3,826 in 2019. Madlan attributes this to the sharp rise rises in the city and new measures that have taken investors out of the market such as reduced financing and higher purchase taxes on second apartments.

Singer said, "In Tel Aviv, we see a fall in the number of deals from the middle of the decade. 2018 was the low-point of the decade in terms of new deals - due to the rise in prices in the city, which greatly reduced the number of potential buyers of new apartments. The capital required to buy an apartment is higher today even in neighborhoods in south Tel Aviv and Jaffa - in fact it has more than double itself in some neighborhoods.

In Haifa too there was a fall in the number of deals from 5,393 in 2010 to 3,525 in 2019.

Beersheva was the most profitable place to buy

Madlan found that Beersheva was the most profitable city for buyers. In 2010, the average price of a second hand apartment in the Negev capital was NIS 580,000 while in 2019 the average price had risen to NIS 1 million, up 73%. The average price over the same period rose 52% in Haifa and 25% in Ra'anana, the lowest percentage in any major city. In Jerusalem prices rose 36% over the past decade.

The luxury housing market ended in 2015

The peak of the luxury market - houses and apartments sold for more than NIS 10 million - was in 2015. Since then the number of deals has been falling while prices are stagnating. The last time a deal bigger than NIS 100 million was seen was in 2014.

In 2010, 121 luxury homes were sold around Israel and in 2015 there were 219 such homes sold but in 2019 there were only 112 such deals. In the entire decade there were 912 luxury deals in Tel Aviv, 258 in Herzliya and 174 in Jerusalem.

The most expensive deal in the past decade was in 2010 when Teddy Sagi bought a house at 46 Galei Tachelet Street in Herzliya for NIS 145.6 million. Interestingly the 960 square meter house at 101 Kaplan Street in Herzliya, which was bought by businesswoman Ruth parasol in 2014 for NIS 71.6 million was sold last year for just NIS 48 million, according to the Israel Tax Authority.

The project that has sold the most luxury apartments in the Meier on Rothschild Tower in Tel Aviv, who has sold 46 apartments for more than NIS 10 million each.

Published by Globes, Israel business news - en.globes.co.il - on January 16, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Construction in Jerusalem  / Photo: Shutterstock, Shutterstock.com
Construction in Jerusalem / Photo: Shutterstock, Shutterstock.com
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