The great demand for premium residential properties in Tel Aviv reached new heights this month, with the price tag reflecting the lengths that developers and buyers are willing to go to own a luxury apartment in the city.The Gabai Group, an Israeli property developer known for its luxury projects, recently purchased a foreign resident a private residence, measuring over 1,100 square meters of interior space, in Tel Aviv’s prestigious Old North neighborhood for 20 Million NIS. The price in itself is not a surprise, as private homes throughout the city command price tags well above the market average. The price per meter in the transaction was significantly below average, making the deal an excellent buy by the Gabai Group.
The big “surprise” here is the Gabai Group’s intentions for the 700 square meter plot. Over the next two years the residence will be demolished and 6 ultra-luxury apartments will be built in their place, each one occupying an entire floor of the building, and containing a minimum of 350 square meters of interior space. Additionally, the penthouse unit is planned to feature a 200 square meter private rooftop terrace, offering breathtaking views to the Tel Aviv skyline and Mediterranean. While a few years ago it may have been unheard of to demolish a in-demand private home on one of the city’s most prestigious streets, today the demand for top end property has reached a point where no other options exist on the table.
Prices in the Old North neighborhood currently average around 45,000 NIS per square meter for top-end property, with prices reaching over 80,000 NIS per square meter in some private homes and the landmark Akirov Towers. The Gabai Group plans to sell their apartments for around 60,000 NIS per square meter, which based on the current market conditions, isn’t expected to cause an outcry from out-priced buyers. The buyers project sales of around 100 Million NIS, making a quiet profit, and inspiring fellow developers to follow suit.
Luxury properties are Tel Aviv’s most in-demand product and the market can only expect that this trend will continue with the city’s continued development and renaissance. What do you think about the luxury real estate boom in Tel Aviv? As always, we’d love to field your questions, comments, and feedback. Chag Purim Sameach!