What’s Going On in Tel Aviv’s Old North?

I’ve been getting a lot of calls this week, no doubt due to my newly designed website. The vast majority of these calls, however, have nothing to do with my listings, rather, they’ve been inquires regarding people’s “dream homes”, which in Tel Aviv means 120 square meters + in the Old North (Arlozorov  St. to the South, Ushishkin St. to the North, the Sea to the West, and Ibn Gavirol St. to the East). This area has been, for the past 60 years or so, the neighborhood most in demand here in Tel Aviv, due to its quiet streets, parks, cafe and boutique culture, and overall pleasurable pace of life. Within it’s humble borders lie some of Tel Aviv’s top destinations, the Tel Aviv Port, Farmer’s Market, Metzizim Beach, Basel Square, and Yirmiyahu St, with such acclaimed restaurants such as David-ve-Yosef, Rustico, and the Michelin rated Mul Yam. I started my career here in the neighborhood and am proud to call myself a long time resident (with no intentions to move, I must add). For me, it’s obvious why everyone wants to live here. That being said, the homes here are among the most expensive in Israel, with the average price per square meter weighing in at 26,000 NIS ($673 per square foot), with the city’s average being 17,796 NIS per square meter ($460 per square foot). Rental prices for a 1 bedroom start from 4,000 NIS ($1,115) and only go way up from there. Pretty heavy stuff. But don’t go crying yet, if you wanted to move here in the first place, you knew that already. So what’s the problem?

The supply in the Old North is quite limited. How limited? Today while browsing the private postings and the MLS there were exactly 57 apartments for sale. Based on my experience, those priced below 30,000 NIS per square meter will be gone before the new year (with apartments I’ve been tracking in the neighborhood selling within 18 days from their entry onto the market if priced within these parameters). Of these 57 apartments, 41 of them were priced below 2,400,000 NIS ($668,430), ranging from studios-2 bedrooms. The 16 remaining homes, ranged anywhere 2,400,000 and topped out at 12.6 Million NIS (3.5 Million USD) for 3-5 bedroom homes. Since last Thursday, I’ve had in excess of 20 future clients contact me regarding homes in the Old North with a minimum of 120 square meters (1,291 square feet), of which there aren’t too many to begin with, due to the neighborhood’s architecture, anywhere from 1.5 to 4.5 million USD.  Also, there are surely other brokers who work in the neighborhood who are good for at least 2 or 3 similar buyers. All this data clearly points to the fact that there simply isn’t enough supply to meet the demand of those looking to buy in the Old North. The trend we are seeing here in the neighborhood are young couples buying up the “cheap” small apartments and renovating them to a high standard. Seems great, the only problem being that as soon as their families grow, they’ll be forced out of the neighborhood and will join the masses looking for  larger homes in the area.

I wish I could sit here and write happily from my armchair that this situation will change, and soon. Unfortunately, I don’t see this as the case. The demand will only continue to rise, prices will, at best, plateau, and we will be in the same situation as we are now. With new projects like the the Assuta Tower on the corners of Jabotinsky and Yehoshua Ben Nun (which was sold within 2 weeks, on paper, without even owning the land yet), and buying groups coming in by the week, this will only be solidified. What will be? We’ll have to hold our breath and see.