The demand and the price of penthouses in most Israeli cities has risen sharply, especially since the beginning of the coronavirus epidemic, and it continues to rise rapidly. This is due to Israelis need for more space, more privacy and prestige…
The penthouse, a house in the skies
Penthouse apartments have several advantages in addition to space and comfort. Located on the top floor of a building and with patio doors, they offer the most breathtaking views of the sea or the roofs of the city. They have large patios, a criterion increasingly appreciated by large families who like to entertain their guests. The patio becomes a convivial space for a dinner in front of a starry sky or a sunny afternoon. Residents often like to install a pool house with barbecue, deck chairs, and a jacuzzi for the trendier ones. The exterior becomes a real living space and all these amenities give these patio-apartments class and prestige. Buying a penthouse today has become one of the biggest investments in the contemporary real estate market. Moreover, penthouses are preferred to detached houses with garden, simply because they allow you to benefit from the services offered by the building, unlike a single-storey dwelling where there is no gym, no janitor and you have to maintain the garden yourself.
The target-market for penthouses
There are two main groups: on the one hand, homeowners who are looking for bigger homes to accommodate their large families. In Israel, most new apartments have no more than 4 or 5 rooms, 6 rooms are extremely rare and for families with more than 5 children, the penthouse meets this need for space. And then there are the foreign residents with high purchasing power, who acquire a penthouse both as a financial investment and as a pied-à-terre for when they decide to make aliyah.
Penthouse prices soar
In recent years many Israelis are looking to upgrade their homes and many are opting to buy a penthouse. According to an article published in Haaretz, an analysis of data from Israel’s number one real estate listing site “Yad2” reveals that in the first three quarters of 2021, demand for penthouses rose by tens of percent in Israel’s 30 major cities, and as a result, prices also rose. Unsurprisingly, by the end of September 2021, Tel Aviv remained the most expensive city. An average second-hand penthouse in the city cost 6 million shekels, a 4% increase over 2019, according to Yad2 data. The second most expensive locality is Givatayim, a suburb near Tel Aviv, where the average price of a penthouse was 4.74 million shekels, followed by Hod Hasharon at 3.92 million shekels, followed by Herzliya at 3.81 million shekels on average and Ra’anana at 3.65 million shekels. Between 2019 and 2021, the average price of penthouses throughout Israel increased by 8% to an average of 2.75 million shekels, while the prices of socalled « standard » apartments throughout the country increased by 4%, reaching 1.79 million shekels.
An increase that continues in 2022, where the prices of penthouses in the heart of Tel Aviv is reaching prices rarely equaled … For a penthouse of 100 to 140 m2 with patio, it will now cost about 8 million shekels …