TAMA 38: A Case Study
(These are the thoughts of CapitIL Real Estate Agency Sales Director Ben Levene.)
This building went through TAMA 38 and had a complete refurbishment including the brand new hallways, a beautiful lobby, and the addition of an elevator. This project and its pricing show clearly how the market has advanced over the past year.
When these units were sold, and I was involved in a number of the deals in this building, 2 bedrooms were sold at around 3 million shekels, 3 bedrooms were sold in the low 3’s to the middle 4’s depending on the size, and the penthouses were sold at 5.5-6.
The 2-bedroom apartments were 900 SQF, the 3-bedrooms were 1000-1250 SQFT, and the penthouses were around 1800 SQFT. All of these new apartments came with parking (penthouses came with two spots), balconies (most sukkah), and included generous top-end technical specifications.
This project was completed around a year ago. In the market today, these apartments would be listed at 45,000 per sqm for a regular apartment, and up to nearly 60,000 per sqm for the bigger ones.
How and why have prices risen so quickly?
This begs the question of why and how have prices risen so quickly from when they were bought off-plan approximately 2 years ago?
There are a few details that lead to this outcome.
Firstly, supply. We speak about supply all the time here in our blogs, and how there is an extreme amount of demand, and minimal supply.
These apartments also tick off many points in a buyer's checklists- sukkah balcony, parking, and Shabbat elevator - which makes these apartments highly valued. The next thing is location.
This project is located in a prime location - 2 minutes from Emek Refaim, (5 minutes from the middle of Emek,) 2 minutes to Nitzanim, and 3 minutes to Rambam.
Lastly, this building has been completely refurbished including the hallways and the stairs.
Though it was a TAMA 38 project, it looks like a completely new build, which is not always the case with every TAMA 38 project, which gives this kind of project a higher value than a TAMA 38 where they have not redone the stairs and hallway.
The higher level of finishing, the higher the demand.
These apartments have gone up higher than the national average
This is a relevant case study to the market today because it allows you to see how prices have developed over the last couple of years.
These apartments have gone up in value somewhere between 20-40% in such a short amount of time. We have been seeing statistics that say the market has risen 16%, but that is for all of Israel.
In prime areas such as Jerusalem, the percentage of increase is, in my opinion, higher. It also shows the potential capital growth over the length of the build when you invest well in an off-plan project.