Tel Aviv Real Estate - August 02, 2005

Recent trends showcase that buyers are willing to pay more for apartments on floors higher up than lower floors. They say this is because these apartments can offer a better view, more privacy, more air and of course much lesser noise. While the costs incurred in shifting into such apartments vary depending upon the building and locality, a general thumb rule that applies to all is that the average price difference between a secondhand apartment in a popularly-priced project is 1 percent of the value of the apartment for each floor. For example, an apartment on the fourth floor will be 3 percent more expensive than a first-floor apartment. While the differences are not much substantial in general projects, it comes through starkly in luxury apartments. Here prices on apartments from the first to fifth floor are tens of percents lesser than for apartments on the fifth floor and above.

In the last week of July, 2005, the Tel Aviv municipality published the fourth tender within five years for the 1.35-dunam (0.34-acre) Bezalel market lot. The minimum price for the lot is NIS 25 million ($5.5 million) and it is zoned for 125 apartments and commercial and public space. The Urban Building Plan (UBP) permits the construction of two residential buildings and accompanying service areas with a total space of 12,800 sq.m. Public spaces and a kindergarten have to be built at the contractor’s expense. A cinema in the basement can be converted to commercial space after paying betterment tax. The complex will also have 200 underground public parking spaces adjacent to parking for the residents. The three previous tenders for this lot have failed and the deadline for submitting bids in the present tender is September 29. The terms of the tender state that the winner must vacate at his own expense a number of stalls that have protected tenant status.

As per statistics by the Central Statistics Bureau, trends in sales of new housing have different pictures to portray in different parts of Israel for the year 2005. In the central region, sales during January to May went down by 26% in comparison to last year. In Tel Aviv, sales were down by 21%, in the northern region by 17% and in the south down by 2%. Increase in sales was noted in Jerusalem where in the first five months of the year 2005, there was an increase of 57%. There was a rise of 220.7% in the sale of apartments in Judea and Samaria in comparison to the same time in 2004.