Tel Aviv Real Estate End of Year Market Report

While the rest of the northern hemisphere is amidst winter, as of December, Tel Aviv refuses to tag along, showing no signs of winter with sunny & warm 24 degrees. The weather, apparently, is not the only thing refusing to cool off in the White City – with high demand and slow increase in inventory, 2014 showed soaring real estate prices.

As we are well into the last month of 2014, the Tel Aviv real estate market is continuing to see effects due to the situation in Europe.The ongoing trend of foreign investors, mainly Europeans, purchasing apartments in Tel Aviv increased even more so, after recent Operation Protective Edge.

“The prices are the same as in Paris” – is probably one of the most repeated statements I heard this year and yet, Tel Aviv cannot be compared to any other market. With its own rules and pace, converting prices per m2 from NIS to EUR or USD is a common mistake that must be avoided, if you wish to purchase an apartment here.  Undoubtedly, 2014 was an interesting year with the first quarter starting off slow, and as anticipated, the market picked up again as soon as spring kicked in. Operation ‘Protective Edge’ had an overall effect on Tel Aviv and its’ lifestyle, and yet even so, the real estate market bypassed it with even higher selling prices, taking the Tel Aviv real estate market into a whole new digit p/m2.   So moment before we say good bye to 2014 and welcome the New Year, let’s review the Tel Aviv real estate market and perhaps this might give us an indication as to what to expect for the new year to come.

List of average NIS p/m2 sold based on location / neighborhoods:

The Old North and Basel:

42,439 NIS per m2

With top streets such as Basel, Eshtori ha-Parkhi, Pki’in, Vormaiza and Vitkin hitting the 47,000 NIS per m2 mark.

Central Tel Aviv West:

41,998 NIS per m2

With Sirkin, Shpinoza, Shats, Graets, Natan HeHaham, Byron and Gordon hitting the 48,000 NIS per m2 mark.

Central Ben Yehuda West:

47,834 NIS per m2

With streets such as Eduard Bernstein and Ruppin selling for over 50,000 NIS per m2!

Kerem HeTemanim:

39,560 NIS per m2

With Geula Street being the top selling price per m2 reaching 43,400 NIS.

Lev Ha’ir:

43,293 NIS per m2

With leading streets like Maze, Yavne, Nachmani, Montefiore and of course Sderot Rothschild selling at 46,594 NIS per m2.

HaBima:

41,004 NIS per m2

With Borochov, Khisin, Shmaryahu Levin, Warburg and the famous Sderot Chen selling at 47,867 NIS per m2!

Central Tel Aviv East:

41,313 NIS per m2

With HaShoftim, Sderot David HaMelech, Dubnov, Zeitlin and Soutine selling for 45,000 NIS per m2.

And finally Neve Tzedek:

With surprisingly only 12 real estate deals in 2014 (so far) at an average selling price of 43,350 NIS per m2.

Most sales occurred, not surprisingly between May, June and July in the Central Tel Aviv, Lev Ha’ir and HaBima neighborhoods.

**The information here is brought through the Israel’s Tax Authority Information System.

As of December, there’s a decline in available inventory, as it is in the slower winter months (November – February). This isn’t cause for alarm as the seasonal dip in inventory should be viewed as more of a strategic indicator of when to buy or sell, and not as a positive or negative indicator of the market itself.

Contrary to popular belief, this is great news for sellers as there is less competition with other homes. Buyers are bound to find some great deals with homes that are priced for the winter market.

The market usually picks up beginning of March, and inventory gradually increases the closer we get to summer, with prices reaching their peak by mid-year (June-July).

In conclusion, I believe this trend will continue for at least another year or two, with prices continuing to rise. As more new apartment buildings and new developments are rising within the Central Tel Aviv area, inventory is picking up, however not at the desired pace and not merely as matching the demand.

So the question remains: is now the right time to buy?

The Tel Aviv real estate market is unique and has set itself apart from the rest of Israel; I really wish had a concise answer to this question, as there’s no way in knowing what the future holds. But I do know this – buying an apartment in Tel Aviv, is a pricey emotional decision for those who can afford it.