Courtesy of the ellita living network (photo: Public Relations)
The year 2022 can already be summed up as one of the turbulent ones experienced by the Israeli economy in terms of the economic-real estate aspect, and it seems that the year 2023
, which has just begun, will also provide quite a few dramas and upheavals.
The whole thing is shrouded in fog, causing many to recalculate a route and re-prioritize their dreams and wishes.
Evidence of this is the sharp drop in the volume of transactions in the real estate market in the last six months.
On the other hand, it is intriguing to see how much the decrease indicates, if at all, a change in the luxury residential market.
We checked with experts.
Dan and Hilla Israelevich (Photo: Oded Smeder)
"The rising interest rate, the meteoric rise in the prices of raw materials and the global recession have a very moderate effect, if at all, on the luxury home market," according to Hila Israelevich, owner of the firm Israelevich Architects, which is responsible for the planning and design of estates and luxury homes.
"Those who intend to purchase or build a luxury house, usually do not rely on a mortgage or a loan from the bank. The vast majority of buyers are global business owners, who have the practical ability to realize and fulfill all their fantasies in their home."
Furthermore, says Israelevich, that "most buyers of apartments in projects in Tel Aviv do so for investment purposes", explains Israelevich.
"They tend to rent them or stay in them on weekends when they come to the big city to enjoy a theater show or an opera. Many of these apartments are purchased "on paper" and then the profit climbs and rises."
"The private houses, on the other hand, are usually built on estates that include areas, some of which are agricultural, where you can build on an area of up to about 2.5 dunams on average and the rest of the area is used as a leisure complex on which horse farms, agricultural buildings, gardens and vast expanses of grass are often built.
These estates are located all over the country, in various settlements, from the Jerusalem area to the far north.
It can be said that in recent years the periphery has become the most relevant for these target audiences."
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Dan and Hilla Israelevich (Photo: Oded Smeder)
"If we look for a moment at the new luxury homes being built in Israel, we will witness an interesting trend," Israelevich explains, "from the outside, most of them are not eye-popping and can even be defined as modest in their unique way. The architectural wealth is revealed slowly, with great mystery, when you enter the private space. The architectural concept And the design itself changes, of course, according to the client's preferences and the size of the area, but the trend itself is similar. Most of these houses are very special and are based on a powerful and experiential living environment."
"The feeling is that you are drawn into another world; the disconnection from the outside is complete and the family members enjoy many very pampering features such as a spacious pool, a gym, a spa, a secondary kitchen near the formal kitchen and guest rooms that have already become standard. The investment per meter in the design of the spaces starts at about 20,000 A shekel, but in this case the sky is definitely the limit. Today, a variety of technological mechanisms and designs are offered, such as a hydraulic pool with a raised floor, light iron stairs (a matter of about a million shekels), televisions that rise and sink into the floor, and more. Today, every fantasy can be realized."
Architect Hila Israelevitz (Photo: Tomer Shalom Studio Thomas)
"30-year-old hi-techists, who redeemed shares and purchased penthouses in Tel Aviv, will no longer be able to do so"
;
According to Adi Lavi, MODY's VP of Marketing and Architect Relations, aspects such as the cost of living, the increase in interest rates, especially on mortgages, and the sharp rise in housing prices are not expected to have a direct, certainly not dramatic, effect on buyers of apartments and luxury homes: "We all feel the The changes in consumption habits in the aspects of leisure, luxury and home design, which occur following the changes in the global economy, however, it does not seem that they will have a significant effect on the buyers of luxury apartments, those who have accumulated their wealth over the years.
Those who may be harmed by the situation that has arisen are the newly rich, in particular employees in the high-tech industry, which is currently in crisis."
Courtesy of MODY (Photo: PR)
"In the two years of the Corona virus, during which the high-tech companies soared, employees who accumulated capital options in the companies constituted a significant purchasing power in the luxury apartment market, but now, when the wave of layoffs in the industry intensifies and thousands of workers are laid off, they prefer to keep the options they have accumulated until the anger passes and the situation becomes clearer. The sons of 30, who a year ago made headlines as those who succeeded against all odds in purchasing penthouse apartments in the center of Tel Aviv, probably won't be able to do so in the near future, on the other hand, owners of capital who accumulated their wealth over years are still strong in the picture. It seems that the luxury housing market will return to the dimensions we knew before the Corona crisis." .
Furthermore, Lavia says, "It seems that the segment of buyers will decrease, but no significant change is expected in the aspect of the choices that buyers will make. We see a stable trend in everything related to the purchase of products of the best international brands - from extremely large pressed tiles, through sinks for thousands of shekels to heated-flushing toilets for tens Thousands of shekels".
Courtesy of MODY (Photo: PR)
"The decline is among the middle class"
According to Amir Shaul, a designer at the luxury furniture concept chain Ellita Living, the financial crisis that is unfolding around the world does not affect those with wealth in choosing furniture details: "Those who purchased luxury furniture before the crisis continue to do so, if so there is a certain decrease, it is among the middle class people who could Until recently, they had to invest a little beyond the range they set for themselves in order to enjoy superior quality, and now they prefer to allocate the resources to other things, in any case, this is a minor decrease."
"People still strive to furnish their homes with the best brands because the furniture is what defines the home," explains Shaul.
"In the meantime, the most prominent trend today is to return Atara to its former glory. The new furniture items are designed in a retro style - an homage to the Fifties and Sixties, with a much higher quality finish and proportions that fit the new living concept. Buyers, who understand that these are products that will remain relevant over time, are ready to invest in order to purchase them ".
Courtesy of the ellita living network (photo: Public Relations)
Eyal Shiman, CEO of Minam-Israel, explains that "it is impossible to deny the effect of the increase in the prices of materials, and the interest rate in the economy.
An effect that is not reflected in luxury projects.
There, there is no hesitation, on the contrary, they want everything big, beautiful and special.
Want to renew with new, intriguing and surprising materials.
As a company that works with large kitchen suppliers in Israel, we see that when it comes to large projects, as mentioned, the orders continue as usual, and when it comes to medium-sized projects, the customers do think.
" "To build or renovate when the prices jump by dozens of percent, definitely makes the decision a weighty one.
I predict that in any case, the renovations in the long term will continue as usual.
Those who want to save, would prefer not to do so in their own home."
The MUTINA brand, courtesy of MODY (Photo: Public Relations)
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