There is a financial anomaly in the prices of assets in Israel as Petah Tikva and Savyon. If you are looking for homes for sale in Israel, this article will help you to understand the Israeli real estate situation. Sometime at the turn of the millennium, a single-family home on 0.12 acres cost about 480,000 dollars. Today the price of such a house has doubled the price several times and is worth 2,500,000 dollars. Yes, those same Benjamin Franklins have all but been forgotten for the past 7 years, as Benjamin has been replaced by Ben Tsvi as the standard for home pricing. Since legislation was passed in 2006 to mandate that home prices be posted in Shekels and not in dollars, home owners are laughing it up with Isaac Ben Tsvi, and to think that he seems kind of sad on the 100 Shekel bill. Start smiling Isaac. Stanley Fisher has made you a real estate celebrity.
At one time Savyon was an object of desire, the stuff of dreams, a marathon distance for most Israelis. While the distance for Petah Tikvans is the same 6 kilometers. Today, for 6 million Shekels you could have your pick of 500 sqm in the new neighborhoods of Savyon or Petah Tikva. Would you choose to realize the Israeli dream of living in Savyon or to drive down Atzmaut Street in Petah Tikva every morning? Honestly, I don’t know. Both of them have a country club, neither has a beach, and the two are separated from each other by Kfar Maas. At one time a home in Savyon used to cost double the same home in Petah Tikva, but no longer. Today the prices are almost identical. Today, 500 sqm with building permits cost 6,000,000 Shekels in Savyon. The same sized lot in the Bat Ganim neighborhood of Petah Tikva costs even more, at a rate of 12,000 shekels per square meter for construction. Building expenses are obviously the same regardless of locale. The cost of a house after above standard construction is around 10,000,000 Shekels.
Interestingly, there are around 340 single-family homes for sale at the moment in Petah Tikva, whereas there are 170 homes in Savyon. The ratio is disproportional to the number of residents in both towns and to the land area allocated to each. Petah Tikva is home to 250,000 residents, with 38,000 dunam allocated to the city, making it the sixth largest city in Israel. Conversely, 3,900 residents live in Savyon and the municipality occupies 4,500 dunam.
Relatively, judging by the number of homes for sale in Savyon compared to Petah Tikva, it seems that the supply of homes in Savyon is much larger. Have the homeowners in Savyon suddenly realized that now is the time to sell their homes after a 65% appreciation since 2007. The real estate graph is no different than other economic graphs, and even capital market trends are not linear, but rather suffer corrections and drops. The residents of Savyon must have gotten wise to this fact. Sell a home today for 10 million Shekels, or around 2.5 million dollars, and buy a city block and a half in Michigan. I was invited to Caesarea this week to look at marketing requests for luxury homes for sale in Caesarea and i found more realtors than residents. Half of Caesarea is for sale, and Augustus Caesar is nowhere to be found. At this rate, Petah Tikva may hit the finish line hand-in-hand with Savyon, and start to tickle Caesarea or break-down in its wake. Warren Buffet has been quoted saying, “We try to be scared when everyone else is greedy and greedy when everyone else is scared”. If Buffet were Israeli, me thinks that in 2013, he would be a bit scared.
Our brokerage office specialist in sales of luxury homes for sale in Israel in the most prestigious areas of the country.
Written by Yossi Mimran, owner of Yokra Estate, specialists in marketing and brokerage of luxury houses for sale in Israel, mainly in Savyon, Arsuf, Kfar Shmaryahu, Herzliya Pituach, Raanana, Hod Hasharon, Petach Tikva, Kfar Saba. Call 054-5455955
