Israel's Luxury Real Estate Market Sees Slowdown, Prices Remain High

In the past year, Israel recorded approximately 630 real estate transactions valued at 10 million shekels or more, with over 60% of these occurring in Tel Aviv. This amounts to about 380 high-end deals in Tel Aviv alone, averaging more than one per day. However, the market has shown signs of cooling, particularly in the first quarter of the year, which saw only 20 transactions exceeding 15 million shekels. The average price for these top-tier deals dropped to approximately 18.3 million shekels, down from about 21.4 million shekels in the same period last year.

Despite the slowdown, the price per square meter in closed deals remains exceptionally high, and in some areas, it has even increased. Buyers continue to pay premium prices for prime locations, though some are opting for smaller properties. Selling apartments in Tel Aviv has become more challenging, especially in the Sde Dov area. In Tel Aviv, 10 million shekels is the entry point for the luxury market. In the northern part of the city, this sum can secure larger apartments, penthouses, and new properties. Areas around Yarkon Park, Kikar Hamedina, and Sector 4 see new transactions closing at 80,000 to 110,000 shekels per square meter, while prime locations like Neve Tzedek, Rothschild Boulevard, and the beachfront can reach 150,000 shekels per square meter and higher.

The buyers in this market are diverse, including high-tech entrepreneurs, senior executives, finance professionals, company owners, and wealthy individuals from the United States, France, and the United Kingdom. For some, these properties serve as primary residences, while for others, they are additional assets offering quality of life, capital preservation, and desirable locations with limited new supply. Specific transactions highlight the market's upper echelons, such as a 656-square-meter apartment on Rothschild Street sold for 106.65 million shekels (approximately 163,000 shekels per square meter), and a 530-square-meter duplex in Neve Tzedek that sold for 91.4 million shekels (approximately 172,000 shekels per square meter).

Currently listed properties reflect asking prices before negotiation, which can be 5% to 10% higher than the final sale price, potentially amounting to hundreds of thousands or even over a million shekels difference. Examples of properties currently on the market include a 470-square-meter house in Ajami listed at 32 million shekels and a 300-square-meter penthouse near Kikar Hamedina listed at 30 million shekels.