American home buyers are flooding the Tel Aviv real estate market


Lucy Hassell, a real estate agent from Washington, DC, moved to Tel Aviv in November after waiting nearly a year. Ms. Hassell, 68, was eager to move into her new home since purchasing her property in March 2020. “I should have moved in May, but Covid put it on hold.”

Ms. Hassell said she has loved Israel since her first visit in her early 20s. When he looked to buy there in 2019, the only suitable property was out of his budget and his offer was rejected.

The day he returned to the United States, Hassell received a message from his Tel Aviv agent that the sale of another apartment in the same building had failed and the landlord would accept his offer. “I bought it without seeing it the next day,” he says. He bought the two-bedroom, two-bathroom, 1,300-square-foot property in Jaffa, also called Yafo, a historic Tel Aviv district, for $ 800,000.

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


Photo:

Nitzan Rubin for The Wall Street Journal

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

“Two years ago, I had one or two consultations a month. Now they are about 20 ”, American citizens, says Matthew Bortnick, director of the Beauchamp Estates local office. “The market used to be dominated by buyers from the UK and France, but the Americans now match them. The biggest deals and the upper end of the luxury market are also dominated by Americans. “He said the biggest sale of 2020, a purchase made by an American couple, was at the Arlozorov 17 condo, for 84 million ILS, or roughly $ 25.2 million.

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

Ms. Hassell’s apartment is in a newly built block 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 buying in Israel

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

Life property: The Israeli government allows anyone to buy property on freehold land, regardless of 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 leased land. Non-citizens can apply for a government permit to allow a purchase in a rental zone.

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 modern urban environment attract a young mix of international residents, while the year-round great weather and beachfront location attract families and retirees.

Local real estate attorney Debbie Rosen-Solow says there are more people buying houses to move in full time. “The deadline for people to move to Israel has been shortened. 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. Average prices for a prime property are $ 1,700 to $ 2,000 per square foot, he says, depending on location, with standard two-bedroom apartments in central Tel Aviv costing more than $ 1 million.

Interest in the city has been fueled by diplomatic relations that were established last year between Israel and the United Arab Emirates. Bortnick reports an increase in investor inquiries in several Middle Eastern countries.

Inna Fleshler, marketing director for Israel Sotheby’s International Realty, says that most high-net-worth clients want properties that are directly on the boardwalk or a street back from the water, which has raised the median price of properties in first line to the sea at 4.8 million dollars. “There is a constant demand. Tel Aviv is a fashion market, ”he says. “Supplies are low because there is not much space to build.”

According to Ms. Fleshler, the most sought-after locations include Rothschild Boulevard, the Neve Tzedek area, and the Galey Tchelet Street coastal strip, Israel’s most expensive location, priced at $ 1,765 per square foot. She says buyers wanting large, ultra-prime properties also gravitate toward Herzliya Pituach, a thriving beachfront neighborhood 7 miles north of central Tel Aviv.


Pay a visit to Tel Aviv

A look at the coastal city of Israel.

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

Nitzan Rubin for The Wall Street Journal

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


Illustration:

JASON LEE

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

Although he’s not moving, Keith likes the city and its international vibe and has business and social connections there. Purchased 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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