The luxury market in Tel Aviv is in a steep decline in the number of transactions, but still leads the luxury market in Israel, by a large margin. “Apartments for NIS 10 million in Tel Aviv are not necessarily apartments in luxury towers, but also rooftop apartments in TAMA 38 projects,” says real estate appraiser Shmulik Cohen of SK Shmaot Ma’atin. The reasons for the decline in luxury apartment sales. In recent months, we haven’t seen huge deals like in previous years, and the most expensive deals were around NIS 25-35 million, and most of them were registered in one project on Yarkon Street in Tel Aviv.”
2 Hayarkon St., Tel Aviv / Image: Viewpoint
Address: 2 Yarakon Street (“Mandarin Oriental” project), Area: 139 square meters, Property Type: Apartment (floor 7 of 25)
The project Cohen is talking about is “Mandarin Oriental”, which is located at 2 Yarakon Street, near the Dolphinarium. The project is led by Herzl Habas, the developer of the YOO and Rothschild 1 towers together with Orit Friedman-Weisman, former CEO of Goldman Sachs Israel. The investors are the founder of the Apex Fund, Sir Ronald Cohen; the chairman and controlling owner of the Chalmobil Group, Dr. Shmuel Harel “P; and the Claridge Foundation controlled by the Bronfman families. The project is in its skeleton phase, and the occupancy date is expected to be the beginning of 2025.
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So far, the Tax Authority’s website has registered 63 transactions carried out in the project in the last two and a half years, five of which were in the first half of 2022. The latest transactions carried out there indicate acceptable price levels of NIS 130-140 thousand per square meter, although there are exceptions to this range.
For example, a 139 square meter apartment on the seventh floor of the project’s 25 floors was sold for NIS 20.14 million – about NIS 145,000 per square meter; A 245 square meter apartment on the 17th floor of the project was sold for NIS 34.3 million – NIS 140,000 per square meter; A similar apartment on the 18th floor was sold for NIS 31.4 million – NIS 128,000 per square meter. The price differences can indicate different planning or air and landscape directions.
Herzliya: 11 transactions compared to 48
The highest transaction in the first half of 2022 was made on Hashel Street in Herzliya Pituach, one of the most expensive streets in this mega-prestigious neighborhood. However, this transaction, in which a villa on an area of 2.2 dunams was sold for approximately NIS 63 million, is only in sixth place on the scale of the most expensive transactions carried out in the neighborhood since 2019. The other expensive transactions carried out in the first half of the year in the city range from NIS 10 to 15 million, Prices that have already become a kind of routine in the city.
Hashel Street, Herzliya Pituach / Photo: Eyal Yitzhar
Address: Hashel Street (Herzliya Pituach), Area: 2.2 dunam, Property Type: villa
Only 11 luxury transactions were carried out in Herzliya in the first half of the year, compared to 48 such transactions registered on the Tax Authority website last year, 33 carried out in 2020 and 25 registered in 2019. The pace of execution of luxury transactions this year indicates a steep drop of about 50% compared to the first half of 2021.
According to real estate appraiser Israel Ya’akov, who specializes in financial support: “When talking about the luxury market in Herzliya, one has to differentiate between expensive neighborhoods and detached houses in Herzliya Pituach. There, after years when property owners in the area took a long time to sell a property, in the last year or two the trend has reversed And the prices jumped by tens of percent immediately after the first closure. Today, the buyers of the luxury villas in this area are newly rich from the high-tech field, the capital market, and also some non-residents who have returned to Israel.
“A plot of land that during the Corona period was offered for sale for 6 million shekels, was recently sold for 8.3 million shekels. Plots for construction in the center of Herzliya Pituach have increased in value by at least 2 million shekels. In the most expensive streets under development such as Eshel, Gali Techelet, Habeslet Hasharon, Ma’afilim, the prices of the plots have increased by -50% to 100%. At the moment there are properties for which any asking price is accepted in the market.”
According to Yaakov, the pace of transactions in Herzliya Pituach can be misleading, since there are not many properties there beforehand and certainly not lots. However, on the face of it, it seems that the depression that afflicts the most prestigious neighborhood in the country is not accidental.
Jerusalem: connecting two apartments into one
While Tel Aviv luxury relies mainly on the local market, with non-residents making up the “edge of the pyramid” and making the most expensive deals, Jerusalem luxury of NIS 10 million and above is almost entirely non-resident.
The Greek Colony area, which is the old luxury area of the city, gathered a significant part of the luxury transactions carried out in the city in the first half of the year. The highest transaction made in the city in recent months was made in North Talpiot, on Caspi Street, where a garden apartment was sold for NIS 29.8 million, but Oren Cohen from Premium Properties emphasizes that this is an entrepreneurial deal for the construction of 12 apartments. Not far from there, on the railway street, an 8-room penthouse apartment was sold for NIS 20.7 million.
Caspi Street, Jerusalem / Photo: Yossi Zamir
Address: Caspi Street (Talfiot neighborhood), Area: Entrepreneurial deal for the construction of 12 apartments, Property Type: Garden Apartment
“The decline in the city is less sharp than is evident from the data of the Tax Authority, because there are quite a few transactions that include the consolidation of apartments, which are registered with the Tax Authority as several transactions,” says Cohen.
Indeed, it is possible to identify several cases in which, in those days, several deals were signed in new projects. For example, during the Passover holiday last April, more than 10 transactions were carried out in several groups, each conducted on a different day, in a project on Malki Israel Street in the Makor Baruch neighborhood; On Jeremiah Street in a new project, two adjoining apartments were sold that day: one for about NIS 11 million and the other for NIS 6.2 million.
So it is possible that the number of luxury transactions is actually higher than what was registered with the tax authority, but this method of purchasing several apartments together is not new and was used last year as well. Therefore this argument cannot explain the phenomenon.
The periphery: In Hadera, the threshold of NIS 10 million was broken
When it comes to luxury outside Jerusalem, Tel Aviv and Herzliya, the prices of the properties in question are much lower. For example, in the first half of 2022, 82 apartments were sold in Be’er Sheva, the prices of which reach NIS 2.5 million or more. For comparison, in all of 2021, 99 apartments were sold in this price range. Last year, two properties were sold in the city at a price of more than NIS 4 million, according to the tax authority.
Last April, a 5-room house, 261 square meters, was sold on Nesher Street in the Neve Ze’ev neighborhood in the south of the city, for NIS 4.14 million. In September, a house was sold on Eliakim Street for NIS 4 million. The house has 9 rooms and covers an area of 242 square meters.
In Yishuv Lehavim, a house with an area of 370 square meters, 8 rooms, was sold last January for NIS 4.55 million.
Nahal Zohar 12, Lehavim / Photo: Diego Mittelberg
Address: Nahal Zohar 12, Area: 370 square meters, Property Type: villa
In Nahariya, seven apartments were sold in the first half of the year at a price of NIS 3 million or more, compared to 12 all of last year.
In Haifa, on the other hand, the number of transactions for NIS 5 million fell from 35 last year to only four in the first half of this year.
The most surprising luxury deal was made in Hadera, when a 166 square meter penthouse apartment on the 25th floor of Asia Group’s “White Beach” project in the southwest of Givat Olga was sold for NIS 10 million, according to the Tax Authority.
1 Baruch Bovaron St., Hadera / Photo: Eyal Yitzhar
Address: Baruch Boarun 1 (project “Hofov Halban”), Area: 166 square meters, Property Type: Penthouse apartment
Another 201 square meter penthouse apartment was sold in the project last year for NIS 10.25 million. This is the first time that properties in the city have been purchased at prices that exceeded NIS 10 million.
“Speaking of a unique project in Hadera, which there are not many like in Israel. It is on the first line to the sea, with an uninterrupted panoramic view, and very quickly became the most prestigious project in the city, where standard 5-room apartments can cost NIS 3.5-4.5 million – a very high price range for a room “. Two years ago the prices of the apartments in the project ranged around NIS 25,000 per square meter, while today they are sold for around NIS 35,000 per square meter, extremely high amounts not only for Hadera’s market.
North of there, a 390 square meter villa was sold on 8 Matsini St. in Dania neighborhood in Haifa for NIS 11.4 million, a penthouse built as part of TMA 38 on Disraeli St. in the center of an estate, was sold for NIS 6.95 million.
8 Matsiani St., Haifa / Photo: Eyal Yitzhar
Address: 8 Matsiani Street (Dania neighborhood), Area: 390 square meters, Property Type: villa
TMA 38 has grown quite a few luxury apartments in the city, as for the first time after many decades, new high-standard apartments are being built in the old neighborhoods of the city.
Nahariya also generated quite a few prestigious TMA 38 transactions, one of which was also the most expensive made in the Galilee in the first half of the year: on Aliya Street in the prestigious west of the city, a 200 square meter penthouse, with an open sea view, was sold for NIS 5.15 million.
Rehovo Heliyeh, Nahariya / Photo: Paul Orleib
Address: Aliya Street, Area: 200 square meters, Property Type: Penthouse apartment
Whereas the most expensive transaction in Be’er Sheva in the first half of the year was a cottage on Nesher Street in the Neve Ze’ev neighborhood, which was sold for NIS 4.14 million. As surprising as it may sound, this is probably the highest transaction made in the city for an apartment.
Hanesher Street, Beer Sheva / Photo: Diego Mittelberg
Address: Hanesher Street (Neve Ze’ev neighborhood), Area: 261 square meters, Property Type: villa