Globes, Eric Mirowski, 08.03.2020
This past year was a year of dramatic declines in the number of luxury deals in the country, and when it comes to apartments that cost NIS 10 million or more - at least a decade ago. This is evidenced by a comprehensive examination of the mega-luxury market in Tel Aviv, conducted by appraisers Shmulik Cohen and Karni Gatrade of SK Real Estate Appraisal. The investigation found that according to the tax authority's figures, only 119 apartments that cost more than NIS 10 million were purchased last year, compared with 150 transactions or more carried out each year in previous years.
Mega-luxury deals in Tel Aviv
These deals further underpin the fact that Tel Aviv is the real estate capital of Israel - 72 deals, which constitute 61% of all mega-luxury transactions - were executed there. A huge gap is found in Herzliya, where 14 transactions were made for NIS 10 million and more, and Jerusalem , In which 13 such transactions were carried out, individual transactions were carried out in Savyon, Netanya, Raanana, Ramat Hasharon, Ramat Gan and Haifa.
Reviewing cheaper deals, at NIS 5 million, also revealed that last year there was a decrease in the number of transactions, compared to 2017-2018.
There is quite a bit of criticism of this method of measurement, which only takes into account asset prices: First, apartments at NIS 5 million are expensive - but not necessarily luxury apartments. In Tel Aviv there are many apartments at this price, which are not luxury apartments.
SK's real estate appraisal review, therefore, included the mega-luxury deals in Tel Aviv signed between 2016 and 2019. These transactions were defined as transactions at NIS 70,000 per square meter and above. The data analysis has provided some interesting insights.
1. The Most Expensive Project: The Yarkon 55
First insight - The most expensive project in the country is David Promenade Residences on 55 Hayarkon Street in Tel Aviv, near the promenade and the sea. The project is by developer Henry Tike, owner of the David Intercontinental Hotel. At the beginning of the decade, when the project was still on paper, the apartments were planned to be sold at levels of NIS 55-70,000 per square meter, but things changed within a few years, and in 2017-2019, three transactions of NIS 140-150,000 per square meter were recorded on the floors. The highs (17-19, out of 25).
The expensive apartment that was purchased in 2018 on the 19th floor - a 228 sq.m. apartment for NIS 34 million - NIS 149,123 per sq.m. On the 14-15 floors, apartments were sold for NIS 116-117,000 per square meter, while on the lower floors, 11-12, apartments were sold for NIS 106-108,000 per square meter. In comparison, in September 2019, an eighth-floor apartment in Akirov Towers was purchased for NIS 14 million, according to NIS 67,000 per square meter.
2. Fewer transactions, and the price per square meter also fell
A second insight is that in 2019 not only the number of transactions is small, but also the prices per square meter. If in 2017 and 2018 the average square meter price for a mega luxury deal in Tel Aviv reached NIS 93-96,000, in 2019 it is Fell to NIS 88,000 per square meter.
Shmulik Cohen: "The decrease in the number of transactions and the price per square meter is partly due to a reduction in the increase of Jews from France, and to a control of the taxation of cash transactions.Luxury buyers from overseas purchase tax are less moving, so they were almost unaffected by the 2015 property tax increase. But the relaxation of the foreign residents market is seen as more closely tied to black money, or one that is not done through reported transfers, "he says.
3. Apartments on the coastline are significantly expensive
A third insight from SK Real Estate Appraisal, which specializes in escorting and financial supervision of real estate projects, is the big difference in prices between apartments along the coastline (First Seaside Nest), for apartments located within the city. Of the ten most expensive apartments per square meter sold In recent years, only one has not been on Hayarkon Street. This is a 100 sqm apartment that was sold two years ago for NIS 14.75 million on Antokolsky Street 3. The 38th floor apartment on the Meyer Tower at the corner of Rothschild-Allenby, 434 sq.m., sold for NIS 45 million, NIS 104,000 for " R, and considering this, it is considered one of the most expensive sold, not off the coast.
The buyers of 2019 also differ in taste: "People have told us that they want less to flaunt in luxury apartments without proportions of NIS 150,000 per square meter. "There is a demand for luxury housing, but no eye-popping on the social level," Cohen adds. Today, the trend is to move from towers to lower buildings, but nonetheless to penthouses.They are about to demolish the building and the penthouse apartment in the new building will cost NIS 100-110,000 per square meter. This is the new trend: leave me to relatively estranged towers, and give me a prime location apartment. "
The most expensive deals in recent years have been on the sea. All their foreign buyers?
"These are deals that are tailor-made for foreigners. Other apartments sold at high prices are mainly looking for quality of life, privacy and location. Leave them to live with dozens of neighbors. They have a rooftop pool, a penthouse, and they have the best equipment. To the sea and pay NIS 150,000 per square meter.
"Friends coming from abroad have the same taste, and they want a first line to the sea, because that's what they got used to from the Riviera.Today's audience is usually high-tech people who have accumulated millions or 60-70-year-olds who have sold their private homes, or apartments in towers, and are looking for these locations and are willing to pay any price.
"The sea is not just a landscape: it's also noise, it's a lot of people, it's festivals. It's not for everyone. For them, the strategic location - Nahalat Binyamin, Rothschild - is the most important. Not towers with eight elevators. NIS 100 million and over. These animals are over. There's no justification for that either. Go see all these apartments in Herbert Samuel, and you'll see 90% of them are dark. In Rothschild projects, people are living. These are not ghost apartments. "