Back to basics

Overseas buyers of real estate are increasingly buying property in more inland towns and cities.

By JOHN BENZAQUEN
September 4, 2008 12:14
3 minute read.
Back to basics

gad hasson. (photo credit: Courtesy)

 
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A new trend seems to be developing in the local real estate market. Up until recently, overseas investors were only interested in buying real estate for investment or residential purposes in towns near the sea. Primarily this meant Tel Aviv, Herzliya and Netanya, but increasingly also Ashdod and Ashkelon. Eilat was also a great favorite, especially for French buyers. But tastes have changed, or, more to the point, they have been forced to change. Overseas buyers of real estate are increasingly buying property in more inland towns and cities. The preference is still for property that can be described as within the metropolitan boundaries of Tel Aviv, but the new trend is slowly expanding inland. Buyers for whom a sea view, or at least a residence that was near the sea, was a very important consideration are now willing to make do with more rustic views and with at least a whiff of the fragrance of citrus blossoms. According to Gad Hasson, a proprietor of the Daniel Itzhaki Group, "There is a definite new trend in real estate: overseas buyers are now willing to consider and acquire property in places they would not have considered a year ago." "I must say that I was pleasantly surprised when overseas buyers started buying property in our projects in the outlaying towns of Tel Aviv, because this never happened before, at least not in substantial numbers," he told The Jerusalem Post. "We have ongoing real-estate projects in Be'er Ya'acov, Lod and Petah Tikva, and they are selling nicely to overseas customers. "Our current flagship project, City Tower in Petah Tikva, is much in demand among overseas buyers of real estate, and from what I hear from my colleagues, it is the same with their projects in the towns surrounding Tel Aviv." New but not surprising This is indeed a new trend but it should surprise no one. The signs were there; it was bound to happen sooner or later. The basic demand for real estate in Israel from the Diaspora is still strong and it will probably remain strong in the future. But these Jewish buyers operate within the economies of their countries of origin; in consequence, the health of these economies and how they affect the financial situation of the buyers determines their level of acquisitions, at least from a monetary perspective. Today, very few overseas buyers can afford the hefty, and at times unrealistic, real-estate prices along the seashore of Tel Aviv, Netanya and Herzliya Pituach. Therefore, if they want to buy property in Israel, they have to compromise. Since 2004, prices for luxury accommodations in these places has risen by up to 250 percent. Prices in some locations on Hayarkon Street and the Herbert Samuel Esplanade have reached $40,000 per square meter and are rising. These prices do not deter the super-rich, but they do deter the "ordinary rich," which in many cases also includes millionaires; penthouses on Hayarkon Street, when available, can cost well over $5 million. Another element that is affecting overseas demand is the strong shekel. Currently it is weakening, but over the past 18 months it has risen by approximately 15% against the dollar. As a result, overseas demand for real estate in the much less expensive inland towns near Tel Aviv is booming. Last week, a Belgian operative in the diamond business bought a penthouse in Petah Tikva's City Towers for approximately $650,000; in that same project, a Moroccan businessman paid more than ¤ 1m. in cash for four apartments . Petah Tikva is not alone in attracting overseas real-estate buyers. Hod Hasharon, an attractive satellite town adjacent to Kfar Saba, is also attracting growing demand. Edna Hasson (no relation of Gad Hasson), the proprietor and vice president of marketing and sales of the Parizat Real Estate Company, told the Post: "We have a large number of ongoing residential realestate projects in Hod Hasharon, and nearly 10% of total sales are to overseas buyers. A family from New York bought a large penthouse in our Shvil Hatapuzim project and, for good measure, also bought an additional apartment. A similar purchase on the Tel Aviv seashore would have cost them at least three times as much."

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