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The luxury real estate market in Israel is an interesting one that includes a wide range of properties and sought-after areas. This market offers properties with international standards of luxury, including meticulous planning and luxurious high-end raw materials, outstanding customized design, a high level of finish and sophisticated accessories, especially spacious interior and exterior spaces, and various extras such as a swimming pool, gym, smart home, elegant furnishing, and underfloor heating.
Most properties in the Israeli luxury real estate market are located in the central region of the country, the majority in Tel Aviv – where 47% of the luxury transactions were executed in 2022, and the remainder in Herzliya, Jerusalem, Ramat Hasharon and other cities. While the properties in Herzliya are mainly large private villas, Tel Aviv and Jerusalem are characterized mainly by extremely luxurious penthouses alongside prestigious homes that integrate ancient history with modern innovation – such as the old stone homes in the Old Jaffa area.
Villas, penthouses and everything in-between
According to the Chief Economist, luxury properties in Israel were defined in 2021 as those whose prices are higher than NIS 10 million. In 2022, this definition was revised to properties whose prices exceed NIS 11.5 million, based on the housing price index of the Central Bureau of Statistics. Properties that are considered “mega luxury” are defined as those with prices of NIS 100 million or more.
In recent years, the number of transactions in the Israeli luxury real estate market has increased. Some of the reasons for this increase are growth in the supply of apartments in new luxury towers and a rise in the buying power of high-tech staff. In 2022, there was a certain decrease in the number of transactions in the luxury market in Tel Aviv compared to a moderate growth in this market in Herzliya and Jerusalem. One of the possible explanations is the greater weight of foreign buyers in these cities compared to the buyers in Tel Aviv. Herzliya also leads in the average price per luxury apartment, which in 2022 was NIS 26.1 million compared to NIS 19.5 million in Tel Aviv. This is because the luxury properties sold in Herzliya are mostly villas whereas in Tel Aviv, they are mainly penthouses in towers.
The number of mega luxury transactions, in amounts exceeding NIS 100 million per transaction, also saw impressive achievements with three leading transactions. In this market, usually only 1-2 transactions per year are executed. Two of the transactions in 2022 are for luxury villas on Galei Tchelet Street, and the third is the sale of the penthouse in the Shalom Tower in Tel Aviv. Slightly below them in value is the fourth transaction of the sale of a triplex penthouse in Tel Aviv. This transaction is part of 11 large transactions executed in the same year in Israel, at prices of between NIS 44 million and NIS 100 million.
Innovative standards of luxury
Although the global events that occurred worldwide in recent years, including the COVID-19 crisis and the war in Ukraine, affect real estate buyers in Israel, they equally strengthen the center of attraction of this market, which is a lifeline for many Jews across the globe for any trouble that may arise. They are particularly fond of the Israeli coastal cities, which are a natural resource that does not exist in many countries abroad. Israel also excels in its proximity to historical sites and the tradition of the Jewish people. These all always make the Israeli luxury real estate market relevant for foreign residents, as indicated by the transaction data in the past year.
Dealing with potential buyers living abroad requires an in-depth knowledge of the different cultures as well as the local language – making it possible to maintain personal relationships, and to identify the properties that suit them best in Israel as well as the opportunities to carry out a successful transaction. In the coming years, there is an enormous potential for growth of the luxury real estate market in Israel, which offers advanced properties in innovative standard of luxury every year.
