American home buyers are flooding the Tel Aviv real estate market

The day she returned to America, Mrs. Hassell received a message from her Tel Aviv agent that the sale of another apartment in the same building had fallen and the owner would accept her offer. “I bought it without seeing it the next day,” he says. He bought the property with two bedrooms, two bathrooms and 1,300 square feet in Jaffa, also called Yafo, a heritage district of Tel Aviv, for $ 800,000.

Despite the global pandemic, Ms. Hassell is part of the growing number of people immigrating to Israel. The Israeli government reported that 16,000 immigrants from 85 countries arrived in the country in 2020 in October. According to Nefesh B’Nefesh, an organization that helps relocate North America and Britain, applications from U.S. citizens increased by 126% in 2020.

“Two years ago, I would have one or two consultations a month. It is now about 20 ”from U.S. citizens, says Matthew Bortnick, director of the local Beauchamp Estates office. “The market used to be dominated by buyers from the UK and France, but Americans now equal them. The biggest deals and the top luxury market are also dominated by Americans. ”He said the biggest sale of 2020, a purchase by an American couple, was at Arlozorov 17 condominium, for 84 million ILS, or about $ 25.2 million.

Tel Aviv is Israel’s most expensive residential market, according to Israel’s Central Bureau of Statistics. Deloitte’s 2020 real estate index, which ranks the most expensive cities in the world, lists Tel Aviv as second in Paris in average transaction costs, at $ 1,084 per square meter, more than double the average of 67 European cities .

Tel Aviv’s vibrant technology scene has made it a business hub and earned it the nickname Startup City and Silicon Wadi. According to real estate agents, job opportunities and the urban and modern environment present a young mix of international residents, while good weather and beachfront location are appealing to families and retirees year-round.

A local real estate lawyer, Debbie Rosen-Solow, says there are more people buying houses to spend full time. “The deadline for people moving to Israel has been reduced. The customers who had it in mind are now moving forward, ”he said.

Bortnick says the Tel Aviv market is unlike any other in Israel, with more international ownership.

“It’s like London or Manhattan,” he says. Depending on the location, the average prices for first-class properties range from $ 1,700 to $ 2,000 per square meter, according to standard two-bed apartments in central Tel Aviv, which exceed $ 1 million.

Interest in the city has been bolstered by the creation of diplomatic relations between Israel and the United Arab Emirates last year. Bortnick reports that investor consultations in several Middle Eastern countries have increased.

Inna Fleshler, marketing director for Israel Sotheby’s International Realty, says most customers with high net worth want properties that are directly on the boardwalk or on a waterfront street, which has raised the average price. of seafront real estate at $ 4.8 million. “There is a constant demand. Tel Aviv is a hot market, ”he says. “Supply is low, because there is not much space to build.”

According to Ms. Fleshler, the most sought-after places include Rothschild Boulevard, the Neve Tzedek area, and the seafront of Galey Tchelet Street, Israel’s most expensive location, priced at $ 1,765 per square foot. She says buyers who want large ultra-prime properties also gravitate to Herzliya Pituach, a tributary waterfront neighborhood 7 miles north of downtown Tel Aviv.

Ultraprime listings include a 12,917-square-foot Baroque-style penthouse in the exclusive Sea One tower, with Sotheby’s International Realty at $ 65 million. Beauchamp Estates currently lists a rare restored Ottoman-era village house in Jaffa with two bedrooms and $ 3.9 million seafront views and a modern 3,164-square-foot penthouse with a large rooftop terrace and pool in the Rothschild Boulevard for $ 9 million.

Despite the high prices, serious investors are betting on the continued popularity of Tel Aviv. Ben Keith, 41, a British businessman and director of the Star Group, bought a second home there two years ago. His 900-square-meter, two-bedroom apartment in Neve Tzedek cost $ 1.35 million. Mr. Bortnick, who sold the property to him, estimates it is now worth $ 1.8 million.

Although he does not move, Mr. Keith likes the city and its international environment and has business and social connections there. He bought for personal use and as an investment.

“Tel Aviv reminds me of Barcelona. He has it all, ”he says. “It’s not a speculative purchase. I think the city is a good long-term investment and will outperform other cities.”