American property buyers are flooding the Tel Aviv housing market

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

Despite the global pandemic, Ms. Hassell is one of an increasing number of people who immigrate to Israel. The Israeli government reported that 16,000 immigrants from 85 countries arrived in the country in 2020 from October. According to Nefesh B’Nefesh, an organization that assists in the relocation of North America and Britain, requests from American citizens increased by 126% in 2020.

“Two years ago, I had one or two consultations a month. There are now about 20 ”of American 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 now Americans match them. The biggest businesses and the upper segment of the luxury market are also dominated by the Americans ”. He said the biggest sale of 2020, a purchase by an American couple, was at the Arlozorov 17 condominium for 84 million ILS, or about $ 25.2 million.

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

Tel Aviv’s vibrant technological landscape has made it a business center and has earned the nicknames of Startup City and Silicon Wadi. According to real estate agents, job opportunities and urban vibrancy attract a young mix of international residents, while the good year-round climate and beachfront location attract families and retirees.

Local real estate lawyer Debbie Rosen-Solow says more people are buying homes to move full-time. “The time limit for people to move to Israel has decreased. Customers who were thinking about it are now going ahead, ”she said.

Mr. 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 top-tier properties are $ 1,700 to $ 2,000 per square foot, he says, depending on the location, with standard two-bed apartments in downtown Tel Aviv costing more than $ 1 million.

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

Inna Fleshler, director of marketing for Israel Sotheby’s International Realty, says that most high-end clients want properties that are located directly on the waterfront or across a water street, which has raised the average price of a top-tier property to $ 4.8 million. “There is a constant demand. Tel Aviv is a heated market, ”she says. “Supplies are low because there is not much space to build.”

According to Ms. Fleshler, places sought include Rothschild Boulevard, the Neve Tzedek area and the waterfront strip of Galey Tchelet Street, Israel’s most expensive spot, priced at $ 1,765 per square meter. She says buyers looking for large, ultra-prime properties also gravitate to Herzliya Pituach, an upscale neighborhood by the sea, 11 kilometers north of downtown Tel Aviv.

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

Despite the high prices, serious investors are betting on 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 two-bedroom, 90-square-meter apartment in Neve Tzedek cost $ 1.35 million. Bortnick, who sold the property to him, estimates it is now worth $ 1.8 million.

Despite not moving, Keith likes the city and its international atmosphere and has social and business connections there. He bought it for personal use and as an investment.

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