Not just a house with a garden: a surge in demand for "special" apartments outside the center

Quite a few people who have previously looked for 4-room apartments are looking to fulfill their dream home with the courtyard or penthouse with the open view.

How did they do it?

Appraiser Nehama Bogin's examination reveals interesting findings

Walla!

Real Estate

22/12/2021

Wednesday, 22 December, 2021, 07:29 Updated: 07:32

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The Oak Quarter in the Valley Tower of the Megiddo Group.

Israelis are beginning to understand that dreams can be fulfilled outside the center (Photo: Lando Studio)

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The desire of Israelis for a private home with a spacious garden or penthouse has increased greatly in the past year and has spread mainly to the northern and southern districts, where the prices of these properties are still low but at the same time the construction of detached houses has fallen sharply.

Thus, for example, according to CBS data between July 2019 and June 2020 in the Haifa district, there were 828 ground-level construction starts, while a year later, construction starts in the district fell to only 666 - a decrease of almost 20% in construction starts for private homes. South There was a drop of over 12% in ground-level construction starts in the same period between July 2020 and July 2021.

Data from the Central Bureau of Statistics: Report of construction starts of detached houses (Photo: Yachz)

The trend has led many potential buyers to move away from the center, where you can find country houses, penthouses or luxurious garden apartments, at prices that many Tel Aviv residents will find unreasonable.

Sometimes the price of a special apartment in the periphery is equivalent to a 3-room apartment in the center of the country

The problem is not necessarily in the shortage of land or its price, but in the delay of Rami and the JNF in thawing agricultural land for construction. Although in the Northern District, for example, there are over 1,000 plans for 470 localities for the construction of private homes on tens of thousands of acres most of which are still with a designation of agricultural land. On them according to the Northern District Planner has the potential for the construction of 100,000 homes. These remarks were made within the framework of the National Committee for Private Construction and Settlement that took place in the Galilee.

Despite the significant decrease in supply in recent months, it can be seen that the demand outside the Tel Aviv metropolitan area for special apartments is skyrocketing. The main reason is that there is still a considerable price gap with the center and a desire for a larger private space than in the past, which was influenced by, among other things, the first corona waves in Israel that caused people to spend a very long time at home.

The trend has led many potential buyers to move away from the center to the periphery, where you can find country houses, penthouses or luxurious garden apartments, at prices that many Tel Aviv residents will find unreasonable.

Sometimes the price of a special apartment in the periphery is equivalent to a 3-room apartment in the center of the country.

Real estate appraiser and lawyer Nehama Bogin examined what happened to the prices of special dwellings and found that the upward trend in the prices of special dwellings in localities around the Gush Dan metropolitan area has increased greatly in the past year, with some localities. Some places even exceed the 20% threshold.

Analysis of the Tax Authority's transactions by real estate appraiser Nehama Bogin (Photo: Yachz)

"The main reason is the demand"

Real estate appraiser and lawyer Nehama Bogin notes: "The Israeli real estate market has shown a very significant price jump in the past year. The reasons for this are very diverse, ranging from growing demand, from failure to meet Rami's marketing goals, procrastination in obtaining building permits, lack of workers, etc. However, in the present case of special apartments, the jump in prices is due to a completely different reason. A premium product designed to cut a smaller population. Since the outbreak of the corona, people have realized that the home is given a new role, it is no longer just a place to sleep or a meeting with children after work. Having a spacious garden, or a huge terrace overlooking a green landscape took on a new meaning in the order of priority and attracted an influx of many couples.This is also the reason why the prices of special apartments showed an increase of about 2 times the average price increase in the last year, which is also higher than usual. "

"The Corona is still in the awareness of people who today are much more looking for the private spaces in their residential apartment." The potential for an increase in the value of the apartment and the rental of the property. Small families who would settle for a 4 or 5 room apartment in the past today are willing to make an effort, also financially to buy a penthouse, garden apartment or ground floor, in order to have the roof, balcony or yard and be willing to pay more for it. If in the past the gaps in the periphery between ordinary apartments and special apartments in the project were about 15% today the gaps start at 25%.

"The main reason is the demand, which has increased, as mentioned, sharply in the last six months in the face of construction starts of private houses that have fallen sharply, as well as the fact that there is a limited amount of special apartments in each project. Special apartments in the west of Migdal Haemek - a completely new neighborhood, Kiryat Malachi and Ofakim and during the last five months we see a sharp increase in demand for these apartments. "Buy it. In Kiryat Malachi, for example, where we are marketing a project of 34 detached houses and garden apartments. We have already sold 50% of the project by word of mouth without going public at all."

The gap between supply and demand requires a different way of thinking.

Nehama Bogin (Photo: Amit Israeli)

"It is possible and even desirable to stay away from overcrowding"

In the "Breeze" project of the Afgad company in Ashkelon, the prices of special apartments have risen by more than 30%. For example, a 5-room mini penthouse apartment (126 sq.m. + a 40 sq.m. balcony) was sold about a year ago for NIS 2.26 million. A similar apartment in the project now costs about NIS 3 million, a difference of 32%. The project is located in the Afridar neighborhood, near the city promenade, about 250 meters from the shoreline.

Yael Dekel-Henig, VP of Marketing at Afgad: "The rise in prices we have experienced in the past year reflects the levels of demand for housing in the city and special apartments in particular, and stems from several reasons: first and foremost the low supply of these apartments. The special apartments can be found in quality and invested projects but relatively few, which are usually located in the attractive areas of the city. In the case of our project, its proximity to the beach and the new promenade and many points of interest in the city, was a significant factor in the rise in prices, and I anticipate that this trend will continue in light of the limited supply and dwindling land reserves. Another equally significant reason is the corona that has caused many, young and old couples and families from all over the country to "recalculate a route" with the understanding that in the age of working from home, and when lifestyle changes it is possible and desirable to stay away from the center.Hence the increase in demand in the last year and the prices accordingly. "

Afgad Company - Breeze Project in Ashkelon (Photo: n-trace)

Eli Agam, CEO of Ampa Israel, who will build a 7-story boutique project in Atlit in collaboration with the rain company, with 5-room penthouse garden apartments, notes: It is no secret that many couples, housing developers and housing enthusiasts are looking for a different and better quality of life Those looking for a quality of life in a spacious home in areas of demand today will have a hard time finding an affordable housing solution because apartment prices have skyrocketed and do not allow people to purchase a large property in areas of demand. .

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• Migdal Haemek

• periphery