"I told them the apartment cost NIS 60 million. They did not blink."

They sit on millions and have no problem spending sums and buying "four in about a week."

The hitchhikers continue to take over the luxury apartment market, and if you were wondering why real estate prices are not expected to fall soon, in this article you will find a very thick connection to apartments worth two million shekels.

David Rosenthal

21/04/2022

Thursday, 21 April 2022, 01:09

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"A young man, maybe 26 years old, came into my office about two weeks ago, with ripped jeans and a worn T-shirt. Looks like a student in the humanities. From there, I sold him four apartments in a week for a total of NIS 15 million. Like him, there are many children my age. The twenty who can put in more than NIS 10 million without a problem. "

The words of Dor Cohen, a luxury apartment broker, correspond well with the reality on the ground: during 2021, there was an increase of no less than 9% in the volume of transactions for the purchase of luxury apartments in Israel, which cost more than NIS 10 million, compared to 2020. According to the Tax Authority. , And as expected, Tel Aviv is the dominant city in Israel with 76 deals.

Processing the data shows that Kfar Shmaryahu leads with an average transaction amount of NIS 22.8 million, followed by Herzliya with an average value of NIS 17.4 million.

Tel Aviv takes third place, 'only' NIS 17.2 million on average paid by the owners for a particularly luxurious apartment.

Netanya's fund as a city that attracts capitalists also remained strong and is ranked fourth, with an average transaction of NIS 16.6 million.

And what about Savyon?

Despite its exclusive image as the most expensive location in Israel, it is ranked last with an average deal of only NIS 16.2 million.

Any fantasy you want to fulfill.

Hitechists' apartment in planning and design by architect Marina Rechter Rubinstein, ReMa Architects (Photo: Amit Gosher)

This review refers only to luxury apartments, but when examining the distribution of the industry to which those who bought a first apartment for more than NIS 4 million belong, the result is still clear: many hundreds of hitchhikers who bought their first apartment last year, especially in the Tel Aviv area.

The study by the Chief Economist at the Ministry of Finance also shows that the average wage of about 2% of young households who bought their first apartment exceeds NIS 54,000 a month, four times the average wage of all households that bought their first apartment in 2021.

It also turns out that the rate of hitchhikers among first-time home buyers stands at 18%, while their overall rate in the population is only 10%.

How much does it cost?

Much more than you think.

Apartment designed by Oron Milstein (Photo: Elad Gonen)

The onslaught of high-tech workers on the luxury housing market is not accidental, but the result of a large number of exits and issues of Israeli companies, which in 2021 amounted to a record amount of $ 82.4 billion.

According to data from pwc, this is a jump of more than five times compared to 2020, when sales of Israeli companies and issues amounted to $ 15.4 billion.

If you add to this number the volume of fundraising for start-up companies that exceeded $ 25 billion, then Israeli high-tech met with $ 100 billion this year.

As a result, the pockets of tens of thousands of Israeli workers were also well padded, some in the millions of shekels.

A large number of them were looking for attractive investment channels to put their money in and they turned to buying apartments for investment.

Many others realized the dream, improved housing and purchased luxury apartments.

Another indication of the huge and available capital accumulated for the industry's employees can be obtained from a survey conducted by Eldar Real Estate Marketing among about 2,000 apartment buyers in the dozens of projects marketed by the company nationwide, which shows that about 27% of all apartment purchases during this period were made by high-tech workers. That means almost every third buyer is a hitchhiker.

Do you want a fireplace?

No problem.

Apartment designed by Shirley Dan (Photo: Gilad Redt)

In fact, in recent years there have been those who have almost eulogized the local luxury apartment market.

After several years of high tide, the developers of the luxury towers and the villa marketers in the traditional luxury localities found themselves at a slump in deals, on the verge of stagnation in some places.

In 2017-2018, some openly admitted that betting on properties with a price tag of tens of millions of shekels turned out to be problematic.

Then came the wave of offerings and tides in the high-tech market that brought the market back to life.

"They control the market with a level hand. I'll give you an example," a luxury apartment broker active in the Tel Aviv area tells us. "A young couple in their thirties arrived on an electric scooter who were interested in a crazy duplex in Tel Aviv. "They did not blink. Like I told them the apartment costs NIS 2 million. It's crazy."

Sometimes it is enough to choose one item.

Luxury apartment for hitchhikers in a living room design by Pietro Hecht (Photo: Yachz)

Alongside that, the big money that flowed from the offerings ended not only in the purchase of expensive real estate, but also in the hundreds of millions of shekels that the hitchhikers spent on the interior design of the apartments.

They have enough money so that they can fulfill all their wishes and fantasies, "notes interior designer Karin Warsaw." I went into the Hezi Bank branch with a hitchhiker and his eyes came out of the holes.

The amount paid only for bathroom accessories was over a quarter of a million shekels.

The bathroom, for example, cost NIS 100,000, "says interior designer Dorit Gabay.

And there is more." It was a fantastic year for businesses in the field of home design.

It is not uncommon for the hitchhiker to come to us and buy a stereo system for the house for half a million shekels.

To you it seems like a crazy amount, for them it's a little money, "adds Danny Levy, an expert in the field of home sound systems." 40-50% of our customers are getting rich new,

And when you open the curtain - what a view.

Apartment designed by Michael Ohayon (Photo: Idan Gur)

The data does not surprise Pietro Hecht: "40-50% of our customers are new rich, some are hitchhikers who made the money in the exit and come to fulfill a dream," say a company that sells luxury furniture, including furniture brands that are considered top in the world such as BENTLEY HOME and FENDI CASA "It's not that every third hitchhiker who comes to us furnishes the house with hundreds of thousands of shekels. There are quite a few who wanted to bring into the house a single luxury item that combines meticulous style, space and luxury. At the same time, when it comes to new apartments, "The architect, and a few hours later they come out with a 'heavy' order for luxury furniture. It's all a question of the brands they choose."

And yet, the company also cautions: "These are not oligarchs who do not bat an eyelid, but a calculated audience, who usually come after a thorough examination of the market, one who is willing and able to pay a considerable sum for a meticulous, prestigious and superbly designed item."

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