Price Rise of Tel Aviv Apartments

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Price rise of apartments in Tel Aviv leads to much creativity on the part of Real Estate entrepreneurs who look for opportunities to earn a profit as a result of lack of building plots. In the case of luxury apartment buildings the opportunity is taken to build on the roofs and add more floors to an already existing, usually older building – a most advantageous plan for residents as the entire building receives exterior renovation, due the age of the building.

Another method practiced in Tel Aviv and in most of the country, is to divide the existing apartments into smaller units and 3-roomed apartments are divided into apartments with 6 rooms. Consequently prices of these smaller units are lower and the apartments are smaller with rooms smaller than the room of an original one-roomed apartment.

A one-roomed apartment built in the 50''s was some 50 sq.m. and today a one-roomed apartment termed a residential unit could be 20-30 sq.m.

The potential occupant finds it easy to pay the rent of these apartments; the leaseholder profits more as he demands the same rents for them as for a standard one-roomed apartment, thus the original 3-roomed apartment after renovation and change transforms into 6 miniature residential units. This causes problems for the other residents – crowded elevators, much more movement and passage in and out of residents, crowded parking outside the building or in the underground parking area and occasionally changes in the outline of the original building and façade due to the additional rooms or floors. Consequently value of all apartments in the building therefore market price will decrease thus original residents will suffer.

Many prospective leaseholders take advantage of the rise in price in Tel Aviv due to the great shortage of rentable apartments in order not to loose out on previous rent levels. Thus even neglected apartments for rent are vacant at exorbitant prices.  Yet Tel Aviv, located in the center of Israel is a major town for commerce and culture and we tend to be forgiving towards its maladies