Mon Dieu, Israeli Realtors Are Missing the French

The luxury rental market has slumped over the past year, with overseas clients particularly thin on the ground

The new Park Tzameret neighborhood in north Tel Aviv.
David Bachar

The year 2016 was a particularly slow one for the sale of luxury real estate properties, with only a handful of sales registering in the tens of millions of shekels. The slackening business affected the deluxe rental market, too, which saw a significant reduction in average rental prices.

Up to three or four years ago, you could still find rentals going for 50,000 shekels ($13,700) a month, including in areas beyond the Tel Aviv shoreline such as Herzliya Pituah and Jerusalem. Now, say realtors who specialize in upscale properties, it’s a different story.

Susan Nissim, a realtor and head of the embassies and foreign companies division at the Anglo-Saxon Herzliya Pituah agency, says rentals of ritzy properties in general – and in Herzliya Pituah in particular – rely on several target populations: the primary one is wealthy Jews intent on immigrating to Israel, but who wish to start off by renting a property before buying.

Transactions by this group, in which French Jews held a prominent place, have fed the market in recent years. However, over the last year, the extent of those making aliyah has dwindled, along with this group’s impact.

In addition, new regulations and laws set up by the French banking system make it more difficult to transfer the amounts that this population used to bring with it to the upper-end real estate market in Israel, both for the purposes of purchasing and renting.

Other target markets include diplomats and representatives of foreign companies operating in Israel. However, says Nissim, these sectors also showed some slowdown.

“You can see a drop in the budgets allocated by embassies for these purposes,” she relates. “Last summer, we rented several villas with pools in attractive locations in Herzliya [Pituah] – such as on quiet streets near Wingate Street. But whereas in the past we managed to rent such properties for more than 25,000 shekels a month, today the average price is 20,000 shekels, or even less than that.”

We heard similar stories from realtors in Jerusalem, where there are hardly any rental deals closing at more than 20,000 shekels a month. The only place where monthly rentals ranging from 30,000 to 40,000 shekels a month can still be found is in the upscale Tel Aviv market. Two kinds of properties are rented for these prices: apartments in high-rise towers and properties close to the shoreline.

Here are some of last year’s most notable luxury rental deals.

A villa in Herzliya Pituah

A year ago, a spacious villa on a 1-dunam (0.25 acre) plot in the northern part of Herzliya Pituah was rented out for 60,000 shekels a month. The area spans some 600 square meters (6,500 square feet), with four levels, including a basement. The property contains an elevator, allowing for easy passage between floors. This is a relatively new building, only 6 years old, with a unique rural architectural design.

Despite the high rental costs, the property is not actually situated close to the shoreline, where you would expect to find the more expensive properties in this, Israel’s most expensive neighborhood. The property is located on one of the smaller streets west of the Kfar Shmaryahu interchange.

According to Nissim, who brokered the deal, the property was put up for rent after the owner tried to sell it but failed to get the price he wanted. However, the returns he gets from renting it are significantly higher than the 3% average for that area. The house was rented by a longtime family in that neighborhood.

Mini-penthouse in Tel Aviv’s Park Tzameret

A mini-penthouse in the Bronze Tower in Park Tzameret, northern Tel Aviv, was rented out for 40,000 shekels a month. The 200-square-meter apartment was designed by Hanan Peri and includes a 70-square-meter balcony with an open sea view, three parking spaces and two storage rooms. The apartment is situated on one of the upper floors of the 29-story high-rise and includes two large bedrooms with en-suite shower rooms, with a further bedroom for a maid. The deal was made with an elderly renter from a well-known family who lives on her own. According to Re/Max Place realtor Orian Cohen, who negotiated the deal, several other deals were concluded for 30,000 to 35,000 shekels a month in this new development in recent years.

The Blue housing project near Glilot, north Tel Aviv
Igal Harari

A penthouse in Park Tzameret

A penthouse in the Manhattan high-rise in Park Tzameret was rented for 37,000 shekels a month. It covers 200 square meters and has a 40-square-meter balcony. In addition to the rent, the renter also pays 4,500 shekels a month in management fees, making the expenses for living there over 40,000 shekels. The apartment is owned by a well-known businessman and was rented to a senior diplomat. It is situated on one of the upper floors of the 31-story tower. There is a beautiful view of the sea from the balcony. The deal was brokered by Asaf Rozio, who owns the Rozio Real Estate agency and who specializes in ritzy properties in Tel Aviv.

A duplex in Ramat Aviv Gimel

A six-room, 250-square-meter duplex in the Aviv high-rise tower in Ramat Aviv Gimel was rented for 35,000 shekels a month. In addition to the rent, the renters pay 4,000 shekels in management fees, bring the monthly costs to 39,000 shekels. The duplex spans two floors of the 17-floor tower and is fully furnished with floor heating and various “smart” systems, as well as a 28-square-meter balcony with a sea view. Rozio brokered this deal as well.

Half a floor in the Glilot complex, Tel Aviv

In the deluxe Blue Tel Aviv housing project, which is located northwest of the Glilot interchange in north Tel Aviv, a half-floor, three-room, 300-square-meter apartment with a 60-square-meter balcony facing the sea was rented for 33,000 shekels a month. The renter pays an additional 4,500 shekels a month in management fees. The apartment interior was designed by an architect and is located in one of the upper floors of the 13-story tower. Tenants enjoy a swimming pool, gym, spa area, tennis court, sauna and the services of security guards. Rozio negotiated this deal, too.

A penthouse in Herzliya Pituah

Toward the end of 2016, a magnificent apartment facing the sea on Hatayelet Street (Ramat Yam) in Herzliya Pituah was rented for 30,000 shekels a month. The penthouse covers 200 square meters and includes four rooms and an enormous 200-square-meter balcony. Nissim brokered the deal. She says the apartment, which was rented to the high-tech employees of an international company, has been renovated and designed as new.

Apartment in Hashoftim Tower, Tel Aviv

An apartment in one of the lower floors of a high-rise situated on the corner of Ibn Gabirol and Shaul Hameleh streets was rented to a well-known businessman and his partner for 26,000 shekels a month. The apartment covers 240 square meters, with a 24-square-meter balcony. Management fees come to 6,000 shekels a month, bringing the total to 32,000 shekels. The tower has two swimming pools, one of which is heated and covered, the other an outdoor pool. It also has a gym, spa with a sauna and Jacuzzi, a meeting room and security services. An upstairs neighbor is Shari Arison, Israel’s wealthiest woman, who lives in a triplex that spans the entire upper three floors. The deal was brokered by Re/Max Ocean.

Hashoftim Tower in Tel Aviv.
Daniel Bar-On

Apartment in high-rise on Frishman Street, Tel Aviv

This apartment, which was rented out for 25,600 shekels per month, comes with management fees of 4,400 shekels a month, bringing the total costs to 30,000 shekels. The apartment is on a mid-level floor in the 24-story high-rise and enjoys a magnificent sea view. It includes three bedrooms, as well as two reinforced security rooms that serve as closets. The apartment area is 120 square meters, with a 30-square-meter balcony. Residents enjoy the benefits of security services, a gym, pool and meeting room. Re/Max Ocean also brokered this rental.

A villa in Herzliya Pituah

A seven-room villa in the fourth line of houses from the seashore, near Tiran Square, was recently rented for 25,000 shekels a month to a family of new immigrants from Spain that wants to buy a house in the area. According to Nissim, who brokered the deal, the villa covers 350 square meters on a half-dunam plot. It has five levels, including a basement, and a swimming pool.