June 23, 2024


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Israel’s best neighborhoods are not the most expensive

Israel's best neighborhoods are not the most expensive

Does the expensiveness of homes in a neighborhood translate into the location’s socioeconomic status? Not necessarily according to an investigation conducted by “Globes.” The Central Bureau of Statistics recently published its latest socioeconomic rankings in which Israel’s neighborhoods were ranked according to ten socioeconomic categories – 10 was the highest category and 1 the lowest. “Globes” found that the most expensive homes were not always in the highest status category.

Take Herzliyah Pituah, for example, one of the most expensive neighborhoods in the country, which is in category 9, while Netanya’s exclusive neighborhood Ir Yamim is only in category 8 along with other Netanya neighborhoods Agamim and Kiryat Hasharon, where housing prices are 25% lower. Tel Aviv neighborhood Sarona, which topped the Central Bureau of Statistics survey, is far from being the country’s most expensive.

Even in Tel Aviv, the neighborhoods where prices have been breaking all records, along Hayarkon Street near the seafront and in the north of the city, are not at the very top. Rova 4, for example, was ranked as Israel’s 40th best neighborhood but prices of new apartments are NIS 60,000-70,000 per square meter, more than in each of the top ten neighborhoods according to the Central Bureau of Statistics socioeconomic survey.

Back in Sarona, real estate appraiser Tamar Avraham who conducted the survey for “Globes,” found that prices per square meter for four-room apartments were only NIS 52,600 per square meter, and NIS 60,000 per square meter on average for five-room apartments. In a recent deal in Sarona, a 136 square meter five-room apartment on the 43rd floor of a tower was sold for NIS 8.5 million – a very high price, in part because of the high floor and the view.

In second place in the Central Bureau of Statistics survey was Tzahala. In a neighborhood of houses and gardens it is not appropriate to talk in terms of price per square meter or even average prices because in many instances the determining factors are the size of the lot, the investment in the property, whether it is detached or semi-detached, and the year in which the house was built. In recent years a number of deals have been completed in the neighborhood where houses have been bought for over NIS 20 million. Tamar Avraham says that at the start of the year, a detached house in Ehud Street in a 411 square meter lot was sold for NIS 25 million. In August 2021, a detached house in Yehonatan Street in a 450 square meter lot was sold for NIS 17.5 million.

In Carmelia apartments are far cheaper than in Denya

In third place in the Central Bureau of Statistics survey was Denya in Haifa, which is well represented in the 10 category. The houses in Denya can fetch high prices. The older houses in the western part of the neighborhood are on relatively small, steep lots while the newer houses are on bigger lots with less steep sloped gardens. Prices of the newer houses begin at NIS 4 million and can fetch as much as triple that amount.

Yet at the same time there are homes in other category 10 neighborhoods in the city where the prices are much lower. Four-room apartments in Carmelia, for example, cost an average of NIS 2-2.4 million (NIS 22,000-25,000 per square meter) and the most expensive apartments have usually undergone TAMA 38 earthquake retrofit urban renewal enhancement. These prices are hardly astronomical in a neighborhood included in category 10.

The Bitzaron neighborhood in west Tel Aviv, which includes the newly built tech office towers, was ranked overall fourth in the Central Bureau of Statistics survey. According to Avraham’s survey, the average price of apartments here is NIS 44,000 per square meter, although some recent deals have been above this amount. One such example is a five-room apartment on the 27th floor on Totzeret Ha’aretz Street, which was recently sold for NIS 5.79 million.

In fifth place overall in the Central Bureau of Statistics survey was Tel Aviv’s Park Tzameret. Prices in the high-rise apartment buildings here average NIS 48,700 per square meter, although some apartments can sell for significantly higher amounts, with many deals worth more than NIS 50,000 per square meter.

In sixth place in the Central Bureau of Statistics survey was the Tel Aviv neighborhood of Afeka. We did not check average prices here but in recent deals a 68 square meter, three-room apartment was sold for NIS 3.6 million and a 77 square meter, three-room apartment was sold for almost NIS 4 million. Both these deal reflect prices of more than NIS 50,000 per square meter, and a large part of the neighborhood is made up of houses and gardens, where there have been no deals over the past year.

Avraham says that the two most recent deals involving houses with gardens in Afeka were in July 2021. In the first a seven-room house on Alumim Street was sold for NIS 15.3 million and in the second a five-room house on Erezei Yehuda Street was sold for NIS 13.8 million.

Price of new homes in Herzliya are approaching Tel Aviv prices

Neve Gan in Ramat Hasharon, Reut in Modi’in and Hamashtala in Tel Aviv complete the top-ten socioeconomic neighborhoods according to the Central Bureau of Statistics survey. Here too the correlation between housing prices and socioeconomic ranking is not as strong as you might think.

Here are some more examples of the way prices and the socioeconomic ranking of a neighborhood do not necessarily match up. There is a small neighborhood in north Rehovot near the Weizmann Institute of Science called Ahuzat Weizmann, which is included in category 10 of the Central Bureau of Statistics survey. The neighborhood comprises towers built about 15 years ago. Two weeks ago a four-room apartment was sold for NIS 2.7 million, typical of the prices in the area, and reflecting about NIS 26,000 per square meter.

In Herzliya two neighborhoods were included in the highest 10 category. The first around Reichman University and the second near the municipal cemetery. In these neighborhoods there is a lot of new construction and prices of new apartments cost around NIS 4 million, about NIS 40,000 per square meter, similar to Tel Aviv.

The highest ranked neighborhood in Givatayim in terms of socioeconomic category is Shetach 9 along Shimon Ben Tzvi Street. Here the average price of a four-room apartment is roughly NIs 3.5 million or NIS 32,000 per square meter. Yet in neighboring Ramat Gan, the Kfar Azar neighborhood has apartments built recently in towers that can fetch NIS 36,200 per square meter (a five-room apartment was recently sold for NIS 4.4 million).

Jerusalem the capital: Conspicuous by its absence

Jerusalem stands out by having no neighborhoods in the Central Bureau of Statistics top category 10. The capital has almost half of its neighborhoods in the bottom 1 category although there are still some very exclusive neighborhoods with major historic significance. Rehavia is only ranked in category seven, even though prices reach NIS 40,000 per square meter. Beit Hakerem, which has similar prices, is ranked in socioeconomic category nine.

Published by Globes, Israel business news – en.globes.co.il – on December 13, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.