Unprecedented boom in luxury housing market

Arlozorov tower Tel Aviv Credit: Guy Lieberman
Arlozorov tower Tel Aviv Credit: Guy Lieberman

As foreign residents seek an Israeli address, and Israelis snap up country homes, "Globes" looks at the biggest deals.

Israel's real estate market continues to flourish despite the Covid-19 crisis, including the high-end luxury market. The Israel Tax Authority site shows that there have been many real estate deals over the past year for NIS 30 million and more, mainly apartments purchased by Jews living abroad.

Real estate agent Oren Katz, who together with his partner Reli Zeidner have been high-end Israeli property agents for more than 20 years, said, "Many Jews living in London, Paris and the US, with an Israeli address or passport, and unable to enter Israel, were sorry that they had not bought a home and are now coming off the fence, after understanding that little Israel is the promised land. This is the factor causing major interest from them and my estimate is that when the skies reopen, there will be a new wave of demand here."

Noam Dzialdow of the Neot Shiran luxury real estate agency said, "The level of interest from foreign residents is very high, but there are still movement restrictions. I believe we'll see even higher demand when the skies open."

Dzialdow adds that Israelis have also been major players over the past year in the most expensive segment of the market. "In contrast to the trend over the past 20 years, in which people have been slowly moving from North Tel Aviv to the towers in the city, Covid-19 created an immediate need for people who can afford it to move to houses with large gardens with access to the outdoors and nature, with a clear preference for being near the sea. This is not a market built on mortgages and interest rates. As soon as the need arose, the deals were done despite the restrictions in movement."

The move to the country typically involves a second or holiday home. Zeidner says, "People want complete privacy and a garden and fresh air and they don't want to live in a tower with lots of other people. Just as people once moved from moshavim (farming villages) to the city, so now they are making the reverse journey. People want quiet, isolation and a haven. Buyers are now seeking a country home that they can stay in for long stretches of time, rather than the holiday homes that they bought in the past mainly for weekends. If in the past they were deterred by the high cost of maintenance and the headache, now the need for a home to escape the city has grown.

Even so, most of the seven most expensive deals over the past year that "Globes' found on the Israel Tax Authority site, were in Tel Aviv and Herzliya.

1. A new immigrant couple from the US bought the complete 28th floor of the Arlozorov 17 project for NIS 84 million. They first agreed to buy a 423 square meter apartment on the floor for NIS 42.5 million and then decided to also buy the other 437 square meter apartment on the floor for an additional Nis 41.5 million.

2. The former US Ambassador's residence in Herzliya was bought by Sheldon Adelson shortly before his death for NIS 230 million. The 1,000 square meters house sits on a 5,000 square meter lot overlooking the Mediterranean on Herzliya Pituah's Galei Tachelet Street.

3. Just around the corner in Herzliya Pituah between Hanasi Ben Zvi, Shlomo Hamelekh, and Basel Streets, Russian-Israeli billionaire Roman Abramovich bought two buildings with a combined area of 3,000 square meters on a 9,500 square meter lot for NIS 226 million from UK hedge fund manager Howard Brevan.

4. Two months ago a foreign resident bought a penthouse in the David Promenade Residences at 51 Hayarkon Street, overlooking Tel Aviv seafront, for NIS 108 million. The 680 square meter apartment also has 330 square meters of balconies. The deal reflects a cost of NIS 130,000 per square meter.

5. Last year a foreign resident bought a five-room, 543 square meter duplex apartment in Neve Tzedek, before construction, for NIS 62.5 million. The three-floor building between Elazar Rokach and Shabai Streets is part of an apartment building with seven units and is due for completion and occupancy in 2023.

6. In June 2020 an estate was sold in Bnei Zion (a moshav in the Sharon region) to high-tech entrepreneur and Check Point Software Technologies Ltd. (Nasdaq: CHKP) co-founder Shlomo Kramer for NIS 40 million, near the home of Shari Arison. The estate includes over 3 acres of land, a 600 square meter house and 200 square meter guest house as well as a large swimming pool, stables and garden.

7. In September 2020 and November 2020, two four-room 249 square meter apartments were sold to Israelis in the Mandarin Oriental project at 2 Hayarkon Street near the Tel Aviv seafront. The apartment sold in September for NIS 34 million was on the 18th of 25 floors and the apartment sold in November for NIS 31 million was on the 11th floor. The tower has 230 apartments and in an adjacent tower will be the Mandarin Oriental hotel. The apartments will be ready for occupancy in 2024. Five other smaller apartments have been sold in the tower over the past year. For example in September an 80 square meter, second floor apartment was sold for NIS 9.8 million.

Published by Globes, Israel business news - en.globes.co.il - on April 4, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Arlozorov tower Tel Aviv Credit: Guy Lieberman
Arlozorov tower Tel Aviv Credit: Guy Lieberman
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