Housing deals in Israel worth more than NIS 10 million represent only 0.4% of the market, even though the strong rise in home prices in recent years has taken the value of many properties over that threshold. Over the past few years there have been deals of that magnitude even in cities like Bat Yam and Hadera.
But 2023 saw only a modest number of deals in the high-end market with only 249 homes sold for more than NIS 10 million, down 50% from the number of such deals in 2022. However, this is not the final figure because the Israel Tax Authority website on housing deals is only updated with several months delay, so there was likely to have been several dozens more such deals last year. Therefore, 2023 is likely to end with 40% less deals in the high=end market, reflecting a similar decline in overall housing deals in 2023.
This is an unexpected finding, since during times of crisis the luxury market tends to shrink more than the overall market. Because of the many delays in publishing such transactions, it is not possible at this time to determine to what extent the war affected this market. So far, less than 20 high-end deals have been recorded on the Tax Authority's website in the last quarter of 2023.
In 2023, the biggest housing deal did not cross the NIS 80 million threshold, while in 2022 there were eight transactions above this amount, half of them over NIS 100 million. In 2021, there were also two deals of more than NIS 100 million, so the depressed economic mood in 2023 - even before the war - also affected the most expensive end of the market.
The leading cities
Tel Aviv continues to lead the high-end market with 60% of the housing deals over NIS 10 million, followed by Jerusalem and Herzliya Pituah, which in the past have each had a similar number of deals. But in 2023 there were 41 deals in Jerusalem over NIS 10 million and only 21 in Herzliya. It could be because most such expensive Jerusalem deals involve religious foreign residents, while Herzliya is more directly affected by Israel's economic performance, marred in 2023 by high interest rates and inflation.
Elsewhere, there were five such housing deals above NIS 10 million in Ramat Gan, four each in Caesarea, Givatayim and Bat Yam, and no such deals in Haifa.
Of the eight most expensive deals last year, five were in Tel Aviv. The most expensive deal was for 64 Rothschild Boulevard, where a detached house for preservation, developed by Boulevard Terra and Rothschild 66, was sold last August for NIS 77.2 million. The house is part of the luxury Villa Rothschild project. The entire complex encompasses 563 square meters, with three floors, a 190 square meter roof, seven underground parking spaces, and a 377 square meter garden.
The second most expensive housing deal last year was Rothschild 1 tower, which was developed about 15 years ago by Habas, which also built YOO Towers. In this deal, a 324 square meter apartment on the 14th floor of the 30-floor Rothschild 1 tower, was sold for NIS 49 million.
Two deals, one tower
The third and fourth biggest deals were also connected to Habas, because the company's former controlling shareholder Hertzel Habas is currently CEO of the Mandarin Oriental project, which is on alternative land given to the developers for the Dolphinarium site, opposite the site. The more expensive deal was a 249 square meter apartment on the 24th and 25th floors sold for NIS 46.8 million. A similar size apartment on the 14th floor was sold for NIS 39.2 million.
The fifth most expensive deal was in Canada Israel's W project on Nissim Aloni Street in Park Tzameret where a 620 square meter apartment on the 42nd to 44th floors was sold for NIS 38 million.
The sixth and seventh most expensive deals were in Herzliya Pituah. A house on a 655 square meter lot on Wingate Street was sold for NIS 36 million and a house on a 730 square meter lot on Keren Hayesod Street was sold for NIS 35 million.
The eighth most expensive deal was a house on a 692 square meter lot on Rakefet Street in Caesarea, which was sold for NIS 31.7 million.
Published by Globes, Israel business news - en.globes.co.il - on February 7, 2024.
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