Spring Season: The Tel Aviv Real Estate Market – April-May 2013

The Tel Aviv skies are painted once again in blue with plenty of sunshine, and sun worshipers seem to be flocking its shores.

Every year as we approach summer, I ask myself – what will be of the Tel Aviv real estate market? Will demand continue to rise? Or are prices getting steeper and steeper, scaring away buyers and foreign investors?

Home prices in Israel are rising, according to new data released by the Central Bureau of Statistics. Tel Aviv however, reportedly saw a dip during the fourth quarter of 2012.

Satisfying? Not quite. Tel Aviv mainly saw a drop in price of larger units (4-5BR homes) during the fourth quarter of 2012 compared to the previous quarter. Home sales in Tel Aviv have shifted recently to less expensive neighborhoods in the south and east of the city, thereby driving down the average price for the city as a whole.

The fluctuation of foreign currency in past months has caused somewhat of an uncertainty among foreigners; however it is the effect of the financial situation in Europe, which seems to be catching the attention of European buyers to the Central Tel Aviv market once again.

Recently in the Basel neighborhood, an 85 SQM fully renovated & designed duplex roof-top apartment with a 35 SQM roof top terrace in a well maintained, elevator building was sold for 3,450,000 NIS; that is 33,658 NIS on a calculation paid per square meter. On a quiet side street by Gordon and Ben Yehuda, an 80 SQM renovated apartment with a 10 SQM sun balcony was sold for 3,740,000 NIS; that is 44,000 NIS on a calculation paid per square meter.

Proving that regardless to rumors, the market has maintained a steady rhythm with prices keeping firm. The average price p/sqm in Central Tel Aviv still ranges between 34,000 NIS to 45,000 NIS.

It is true that investors are less and less interested in Central TLV, but that is because, great deals are hard to find now days and in spite of Tel Aviv’s high-priced rentals, the average yield on an apartment comes to about 3.3% annually.

The rental market as well has kept a steady pace, with renovated 2BR apartments in Central Tel Aviv ranging between 7,000 – 8,000 NIS.

The spring-summer season has been known to be as the ‘high season’ in real estate along with high demand and large supply of apartments. Good apartments in prime locations don’t last long in the market and are normally sold way before anyone notices. So if it’s location you’re after, make sure to be well prepared and decisive in the next couple of months. For those after higher-end properties, the market currently offers a range of beautiful, fully renovated or all new mini-penthouses, duplexes and penthouses spread all across the city.

In overall, the spring-summer time offers a wider range of properties to choose from; prime location apartments can be found however still high-priced and know that competition over a property during the next couple of months can be tough.