US buyers flood Tel Aviv real estate market

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Lucy Hassell, a real estate agency from Washington, DC, moved to Tel Aviv in November after waiting almost a year. Ms Hassell, 68, had been eager to move to her new home since buying her property in March 2020. “I should have moved in May, but Covid put her on hold.”

Ms Hassell said she loved Israel since she first visited in her 20s. When she looked to buy there in 2019, the only suitable property was out of budget and her offer was turned down.

On the day of her return to America, Ms Hassell received a message from her Tel Aviv agent that the sale of another apartment in the same building had failed and that the landlord would accept his offer. “I bought it without seeing it the next day,” she says. She bought the 1,300 square foot property in Jaffa, also known as Yafo, a heritage district of Tel Aviv, for $ 800,000.

Lucy Hassell, an American real estate agency, moved from Washington, DC, to her 1,300 square foot apartment in Tel Aviv in November after a wait of almost a year.


Photo:

Nitzan Rubin for the Wall Street Journal

Despite the global pandemic, Ms Hassell is among a 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 assists with relocation from North America and Britain, applications from U.S. citizens increased 126% in 2020.

“Two years ago I would have one or two inquiries a month. Today, that’s about 20 inches of U.S. citizens, says Matthew Bortnick, manager of the local Beauchamp Estates office. “The market was once dominated by British and French buyers, but the Americans now match them. The biggest deals and the high end of the luxury market are also dominated by the Americans. He said the biggest sale of 2020, a purchase by an American couple, was for the Arlozorov 17 condo, 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 world’s most expensive cities, ranks Tel Aviv second after Paris in average transaction costs, at $ 1,084 per square foot, more than double the average of 67 European cities.

Ms. Hassell’s apartment is in a new building in Jaffa, a historic district of Tel Aviv.


Photo:

Nitzan Rubin for the Wall Street Journal


A new life in Israel

Washington, DC real estate agent Lucy Hassell moved to Tel Aviv after feeling a deep connection to the city

Lucy Hassell’s kitchen in her new apartment in Tel Aviv.

Nitzan Rubin for the Wall Street Journal

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Rules for purchasing in Israel

Most of the land in Israel is owned by the state. There are different regulations governing the sale of property on state-owned land and freehold private land.

Full ownership: The Israeli government allows anyone to buy property on freehold land regardless of their religion or citizenship.

Lease: Property on state-owned land is sold on a lease basis. Only people with the right to Israeli citizenship can buy property on leasehold land. Non-citizens can apply for government permission to authorize a purchase in a leasehold area.

Tel Aviv’s vibrant tech scene has turned it into a business hub and earned it the nicknames Startup City and Silicon Wadi. According to realtors, the job opportunities and hip city vibe attract a young mix of international residents, while the year-round good weather and beachfront location appeal to families and retirees.

A local real estate attorney, Debbie Rosen-Solow, says there are more people buying homes to move into full-time. “The time frame for people settling in Israel has shortened. Customers who had it in the back of their mind are now moving forward, ”she said.

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

“It’s like London or Manhattan,” he says. Average prices for prime properties are $ 1,700 to $ 2,000 per square foot, he says, depending on location, with standard two-bed apartments in central Tel Aviv costing over $ 1 million.

Interest in the city was boosted by the establishment of diplomatic ties last year between Israel and the United Arab Emirates. Mr Bortnick reports an increase in investor inquiries in several Middle Eastern countries.

Inna Fleshler, Marketing Director for Israel Sotheby’s International Realty, says most high net worth clients want properties that are either right on the waterfront or one street back from the water, which has pushed up the price. average prime beachfront properties at $ 4.8 million. “There is constant demand. Tel Aviv is a hot market, ”she said. “Supplies are low because there isn’t a lot of space to build.”

Sought after locations include Rothschild Boulevard, the Neve Tzedek district and the Galey Tchelet Street waterfront, Israel’s most expensive location, with prices of $ 1,765 per square foot, according to Ms Fleshler. She says buyers who want large, ultra-premium properties also gravitate to Herzliya Pituach, a thriving beachfront neighborhood 11 km north of central Tel Aviv.


Find the route to Tel Aviv

A look around the Israeli coastal city.

The Tel Aviv Museum of Art is Israel’s largest art museum. It houses a collection that includes Picasso and Monet.

Nitzan Rubin for the Wall Street Journal

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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 and restored Ottoman-era townhouse in Jaffa with two bedrooms and waterfront views for $ 3.9 million, and a modern 3,164 square foot penthouse with a large terrace on the rooftop and a swimming pool on Rothschild Boulevard for $ 9 million.


Drawing:


JASON LEE

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

Although he does not relocate, Mr. Keith enjoys the city and its international atmosphere, and maintains business and social connections there. He bought for personal use and as an investment.

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

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