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Some 115 luxury apartments were sold in Israel in 2015 for at least NIS 10 million, while only 16 houses sold for at least that price – suggesting a reversal in the demand by wealthy Israelis, who now desire luxury units rather than private houses with gardens.
The figures were gathered in research conducted by Dr. Rina Degani, an urban planner and CEO of Geocartography, ahead of the Netanya Real Estate Forum that was held on Monday at Netanya Academic College.
Degani pointed out that any apartment costing more than NIS 2 million was once designated as a “luxury apartment.” Now such residences account for 17% of the total transactions in apartments.
According to the figures, 82% of luxury apartments were sold in Tel Aviv and 12% in Jerusalem, with Herzliya and Netanya trailing behind. Even more expensive apartments – which cost more than NIS 30 million and account for 5% of the luxury deals – were found only in Tel Aviv.
In Jerusalem, 27% of luxury apartments sold for NIS 20-30 million, while in Herzliya and Netanya the most expensive luxury units sold for less than NIS 20 million.
Tel Aviv, of course, leads the charts with an average price of NIS 76,000 per square meter, compared with NIS 70,000-74,000 per square meter in Herzliya or Jerusalem and a “mere” NIS 53,000 per square meter in Netanya.
The Geocartography team divided the buyers into three primary segments: foreign residents (Diaspora Jews); the top 0.1%; and the nouveaux riches – specifically young adults who successfully raised money in the high-tech scene.
A third of Manhattan prices
Degani also compared the luxury real estate market in Israel with Manhattan, New York (a market that is showing the early stages of a cooldown). The data are based on the recent sale of 35 Manhattan apartments for at least $20 million (half were sold for $20-25 million, 30% for $25-30 million, and 20% for $30-45 million).
The figures, based in part on data from real estate firm ONEManhattan, show that Tel Aviv is still far behind the New York luxury market. The average price per square meter in New York is $56,000 – close to three times the figure in Tel Aviv. Recently, a 520-square-meter apartment near Central Park sold for $45 million – $86,000 per square meter.
Degani: “Tel Aviv is in the process of becoming the Manhattan of Israel. Many more towers will be built, there will be a greater supply of ‘ultra-luxury’ for the rich, the successful, and the well-known; the luxury apartment club will gradually expand to other cities – which is already happening. In the past decade, there were only 4-5 cities which saw deals of more than NIS 5 million for an apartment – but today we see at least 10 such cities.”