Deal Analysis / Rules stay the same in Savyon

The 11 transactions under analysis, all in Savyon, are of two types: one-dunam lots zoned for the construction of two housing units, which changed hands for NIS 3.7 million to NIS 3.8 million, and one-dunam lots zoned for one house, which sold for NIS 2.6 million to NIS 3.6 million. The winners of the Israel Lands Administration tenders for two-family lots have to add NIS 210,000 per lot for development costs and VAT. Those buying the lots for one house have to add NIS 270,000 per lot for development costs and VAT.

The two most expensive lots are designated for two-family cottages, each of which may have a maximal interior area of 250 square meters plus storage space and parking, which adds 55 square meters.

Another nine lots are zoned for building one-family houses with built-up area of 310 square meters, plus 65 square meters of parking space and a security room (mamad).

Savyon is considered one of the wealthiest towns in Israel, despite its proximity to Ben Gurion International Airport - though to be fair, Kiryat Savyonim and Neve Monson separate the airport from the town. The lots are located around the eastern boundary of Savyon.

Lots for two-family homes are a fairly new animal in the Savyon real estate market. Africa Israel has been marketing similar lots in the area for NIS 2.7 million per half-dunam. The prices in the tenders under discussion are somewhat lower, but once you factor in development costs and VAT, the final price is NIS 4 million to NIS 4.5 million per housing unit. And that's roughly what Africa Israel is asking for.

Regarding the single-family lots, the price differences between the winning bids are large - but generally speaking, they changed hands for NIS 3 million to NIS 3.1 million. Ultimately, adding the construction costs, each house will cost NIS 6 million to NIS 6.5 million. And that is roughly what a house costs in Savyon.

The bottom line is that the prices may sound high, but they're in keeping with the norm in that area.

Guy Leshem of Leshem Properties helped with this analysis.