Summer in winter

Eilat’s real-estate market supplies reasonably priced housing to locals and offers the luxury segment spectacular holiday homes.

By JOHN BENZAQUEN
Eilat housing_521 (photo credit: Courtesy)
Eilat housing_521
(photo credit: Courtesy)
For Russians, Britons and other Europeans from the northern part of the continent, Eilat is “summer in winter,” with the added advantage of being in the Holy Land.
Eilat’s whole economy is tourist-oriented, servicing both foreign tourists and Israeli locals coming to sample the delights of a resort by the azure waters of the Red Sea.
Many of the inhabitants of Eilat make a living from the tourist industry and are employed in hotels, restaurants and pubs, nightclubs and discos which cater to the tourist trade. Their level of income is thus linked to the number of tourists visiting the city and the amount of money available to prospective home buyers has a direct effect on real estate prices.
But tourism has another important bearing on the city’s real estate scene. As a resort town, Eilat attracts wealthy buyers who want a holiday home in the city.
This mainly affects the high-end segment of the industry, but when demand for super-expensive real estate seeps down, it affects the whole industry.
In Israel, there is much overseas demand for real estate, but the demand in Eilat is different from that in Jerusalem, for example.
Demand for real estate in Jerusalem is motivated by religious considerations. Jerusalem is a holy city, and the pull of the city is spiritual.
The last thing that can be said about Eilat is that it has spirituality.
Nearly all overseas demand for real estate in Eilat is from those who want a holiday home, the emphasis being on “holiday.” Furthermore, Eilat is a small city with some 55,000 inhabitants, a fact that at times has had a very big influence on real estate prices.
Eilat is a virtual oasis in the middle of a vast desert area, devoted to catering to the needs of holidaymakers. Steadily developed as a tourist center since its founding, it has become Israel’s largest tourist center, with 12,000 hotel rooms out of a total of some 50,000 rooms in the whole country.
The real-estate market is divided between that which supplies the need of local inhabitants – homes for those residing in them 365 days a year, who cannot afford the luxury of a holiday home – and the luxury segment, where demand is primarily from buyers in Russia, the UK and France. The French used to be the main buyers, but today it is not the euro but the ruble that changes hands. The French are not completely out, but the Russians are definitely in.
Arik Harel, general manager and proprietor of the Anglo Saxon Real Estate agency in Eilat, told Metro: “Today’s real-estate market in Eilat is influenced by the current general trend in Israel as a whole. The market is not exactly hot, though I would describe it as much calmer than in Israel as a whole.
“There is a certain demand, but it is certainly not a seller’s market, as it used to be in the not so distant past. Buyers can in most cases negotiate the asking price.
In contrast to other parts of Israel, the supply situation is satisfactory. There is sufficient new housing being sold by developers, as well as home owners who want to sell.”
Prices in Eilat are not excessive by local Israeli standards.
Four-room, 120-square-meter apartments in Eilat sell from NIS 650,000 to NIS 1.2 million, depending on location and age. A semi-detached home in the high-end Shachmon quarter on a plot of up to 400 sq. m. can cost NIS 1.85 million on average.
These prices are affordable to the bulk of the population – not so regarding the prices of the many holiday homes built in the city and marketed to overseas customers and local businessmen. The prices of these holiday homes are still quoted in US dollars, and they are very expensive.
One of the most favored areas in Eilat for those luxury holiday homes is a neighborhood called Ganim Beit, an elevated, sloping area of land facing the sea on the road to Taba. Up to now, various development companies have built or are building exclusive luxury dwellings in this area, most of them facing the sea.
The Abgad company has built a closed estate called Aquarel: three-story buildings which contain ground-floor garden apartments, first-floor terraced apartments and penthouses on the top floor. These dwellings are being sold from $350,000 to $1.8m.
The latest addition to the Ganim Beit galaxy of spectacular apartments is called Atlantis. Fourteen three-story buildings each have two apartments: the lower apartment located on the ground floor of the building and on half of the first floor; the upper apartment located on the other half of the first floor and on the floor above, which is the top floor.
Ya’acov Atrakhi, general manager of the Aura- Israel Investment Company, which is building the project, is playing it safe – his prices are being quoted in euros, and they range from €600,000 to €700,000.
But are there buyers intending to occupy such expensive holiday homes, or are they being bought as an investment? Atrakhi believes the former.
“Before we started this project, we analyzed the market very carefully. For the past 10 years, overseas buyers have been acquiring holiday homes in Eilat, and they have been paying top prices.”
Recent transactions in Eilat
• A three-room, terraced, 80-square-meter apartment with an 8-sq.-m. terrace in a three-story, seven-apartment block built five years ago sold for NIS 650,000.
• A four-room, 92-sq.-m. apartment in a 14-year-old apartment block sold for NIS 600,000; while a 117-sq.-m. apartment in the same building sold for NIS 690,000.
• A new, 175-sq-m. semidetached dwelling with a 140-sq-m. garden and double parking sold for NIS 1.73 million.
• A 150-sq-m. rooftop apartment sold for NIS 1.45m.